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Cricut, Inc. (CRCT)
:CRCT
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Cricut Inc
(NASDAQ:CRCT)
72Outperform
Positive Factors
Operating Margins
The company is driving slight operating margin expansion despite the more challenging backdrop.
Product Innovation
The company's renewed focus on new product introductions is a reason for cautious optimism.
Profitability
Better gross margins resulted in higher profits for CRCT.
Negative Factors
Consumer Electronics Market
Overall consumer electronics spending remains challenged, with more US consumers expecting to spend less on consumer electronics.
Revenue
CRCT missed the 4Q revenue estimate, impacting overall confidence.
User Engagement
Declines in active users, engaged users, and total revenue are concerning amidst high marketing spend.
Cricut Inc (CRCT) vs. S&P 500 (SPY)
Market Cap
$1.10B
Dividend Yield3.88%
Average Volume (3M)372.02K
Price to Earnings (P/E)17.7
Beta (1Y)0.33
Revenue Growth-6.88%
EPS Growth18.09%
CountryUS
Employees640
SectorTechnology
Sector Strength44
IndustryComputer Hardware
Share Statistics
EPS (TTM)0.29
Shares Outstanding52,358,753
10 Day Avg. Volume279,933
30 Day Avg. Volume372,024
Financial Highlights & Ratios
PEG Ratio0.98
Price to Book (P/B)N/A
Price to Sales (P/S)1.60
Price to Cash Flow (P/CF)2.80
P/FCF Ratio2.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.76Price Target Upside-7.75% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering4
Cricut Inc Business Overview & Revenue Model
Company DescriptionCricut Inc (CRCT) is a leading technology company specializing in the production of smart cutting machines and related products designed primarily for the consumer crafting market. The company's flagship products include a range of electronic cutting machines that allow users to cut a variety of materials such as paper, vinyl, and fabric. In addition to hardware, Cricut offers a suite of software and digital content that enhances the crafting experience, enabling users to design, cut, and create personalized projects with ease.
How the Company Makes MoneyCricut Inc generates revenue through the sale of its smart cutting machines, accessories, and consumables such as blades and cutting mats. A significant portion of its earnings also comes from its software and subscription services, which provide users access to a vast library of designs and projects through its Design Space platform. This subscription model not only adds a recurring revenue stream but also enhances customer loyalty by integrating digital content with its hardware products. Cricut's partnerships with retailers, both online and brick-and-mortar, also play a crucial role in its revenue generation, ensuring widespread distribution and availability of its products.
Cricut Inc Financial Statement Overview
Summary
Cricut Inc is maintaining strong profitability with healthy profit margins despite a decline in revenue. The balance sheet is robust with low leverage and a high equity ratio, and the company shows significant cash flow growth.Income Statement
Cricut Inc has shown a decline in revenue over recent years, from $1.3 billion in 2021 to $712 million in 2024. However, the company maintains healthy gross and net profit margins, with a gross profit margin of 49.5% and a net profit margin of 8.8% in 2024, indicating strong profitability despite declining sales. The EBIT margin of 10.7% demonstrates solid operational efficiency.70
Positive
Balance Sheet
The company exhibits a strong equity position with an equity ratio of 67.4% in 2024, indicating substantial ownership. Although the debt-to-equity ratio is low at 0.03, signifying minimal leverage risk, the return on equity has decreased to 13.5%, reflecting a decline in shareholder returns. Overall, the balance sheet remains robust with considerable liquidity.75
Positive
Cash Flow
Cricut Inc has demonstrated significant growth in free cash flow, increasing from $83.9 million in 2022 to $246.6 million in 2024. The operating cash flow to net income ratio is notably strong at 4.22, suggesting effective cash generation from operations. The free cash flow to net income ratio of 3.92 underscores efficient capital management.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 712.54M | 765.15M | 886.30M | 1.31B | 959.03M | Gross Profit |
| 352.79M | 343.29M | 349.89M | 457.45M | 332.37M | EBIT |
| 76.11M | 69.98M | 79.95M | 192.41M | 200.51M | EBITDA |
| 118.21M | 109.91M | 109.83M | 215.66M | 214.63M | Net Income Common Stockholders |
| 62.83M | 53.64M | 60.67M | 140.47M | 154.58M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 336.91M | 245.14M | 299.20M | 241.60M | 122.22M | Total Assets |
| 693.03M | 750.12M | 949.63M | 1.01B | 581.40M | Total Debt |
| 15.21M | 14.17M | 19.37M | 19.54M | 0.00 | Net Debt |
| -216.93M | -128.02M | -205.57M | -222.06M | -122.22M | Total Liabilities |
| 226.27M | 215.25M | 276.89M | 332.27M | 352.48M | Stockholders Equity |
| 466.76M | 534.87M | 672.74M | 673.98M | 228.93M |
| Cash Flow | Free Cash Flow | |||
| 246.63M | 264.38M | 83.91M | -140.74M | 226.38M | Operating Cash Flow |
| 264.97M | 288.10M | 117.68M | -104.95M | 248.23M | Investing Cash Flow |
| -18.33M | -48.78M | -107.87M | -35.79M | -21.84M | Financing Cash Flow |
| -156.44M | -322.19M | -26.25M | 260.24M | -110.92M |
Cricut Inc Technical Analysis
Negative
5.16
Price Trends
5.54
Negative
5.57
Negative
5.78
Negative
Market Momentum
-0.11
Positive
39.93
Neutral
18.51
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRCT, the sentiment is Negative. The current price of 5.16 is below the 20-day moving average (MA) of 5.36, below the 50-day MA of 5.54, and below the 200-day MA of 5.78, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 39.93 is Neutral, neither overbought nor oversold. The STOCH value of 18.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRCT.
Cricut Inc Risk Analysis
Cricut Inc disclosed 82 risk factors in its most recent earnings report. Cricut Inc reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cricut Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.23B | 12.19 | 24.55% | ― | -1.13% | 163.15% | |
74 Outperform | $3.27T | 34.64 | 136.52% | 0.46% | 2.61% | -2.14% | |
72 Outperform | $1.10B | 17.67 | 12.55% | 3.88% | -6.88% | 18.09% | |
67 Neutral | $111.01B | 31.58 | -47.07% | 2.41% | -1.48% | -17.32% | |
63 Neutral | $8.45B | 22.05 | 34.75% | 3.46% | -17.28% | ― | |
57 Neutral | $20.97B | 10.32 | -14.01% | 2.49% | 4.46% | -23.38% | |
48 Neutral | $405.89M | ― | -14.59% | 6.86% | -9.09% | -356.14% |
* Technology Sector Average
Performance Comparison
CRCT
Cricut Inc
5.15
0.87
20.33%
ACCO
ACCO Brands
4.19
-0.79
-15.86%
AAPL
Apple
222.13
54.08
32.18%
HAS
Hasbro
61.49
8.13
15.24%
MAT
Mattel
19.43
-0.19
-0.97%
SBUX
Starbucks
98.09
11.01
12.64%
Cricut Inc Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: -1.15% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong net income growth and successful product launches countered by declining overall sales, particularly in accessories and materials, and ongoing challenges in user engagement. The company is making significant investments in marketing and R&D to address these issues, with an expectation of improvement in the second half of 2025.Highlights
Positive Net Income Growth
Cricut, Inc. achieved its eighth consecutive year of positive net income, generating $62.8 million, which is a 17% increase from the previous year. This also resulted in a $0.05 increase in diluted EPS for the full year.
Increase in Paid Subscribers
The company saw a 7% increase in paid subscribers, reaching 2.96 million by the end of 2024. This signifies a growth in subscriber base by 189,000 year on year and 121,000 sequentially in Q4.
Launch of New Cutting Machines
Cricut launched the next generation of its popular cutting machines, Cricut Explore 4 and Cricut Maker 4, which are up to 2x faster than previous models and have received positive feedback from retailers and end users.
International Revenue Growth
International revenue increased by 3% in Q4 2024, with international sales representing 25% of total revenue compared to 22% in Q4 2023.
Continued Cash Flow Generation
Cricut generated $265 million in cash from operations in 2024, maintaining a debt-free status with cash and cash equivalents of $337 million.
Lowlights
Decline in Total Company Sales
Total company sales declined by 7% in 2024, with Q4 revenue of $209.3 million reflecting a 9% decline compared to the prior year.
Decrease in Accessories and Materials Sales
Accessories and materials sales declined by 20% for the full year, a significant drop that contributed to overall revenue decline.
Challenges in User Engagement
Engagement metrics showed continued softness, with a decrease in active users by 0.7% and a 3.1% decline in 90-day engaged users year on year.
Pressure on Operating Income
Operating income is expected to decline in 2025 due to increased investments in R&D, marketing, and IP protection actions, with margins anticipated to be lower by two to three percentage points.
Connected Machines Revenue Decline
Revenue from connected machines decreased by 13% in Q4, driven by fewer units sold and higher promotional activity.
Company Guidance
During Cricut, Inc.'s fourth quarter 2024 earnings call, the company provided various metrics and insights into their performance and future plans. The fiscal year 2024 marked their eighth consecutive year of positive net income, generating $62.8 million, a 17% increase compared to 2023, resulting in a $0.05 increase in diluted EPS. However, total company sales declined by 7%, and active users decreased by 0.7% to 5.89 million. The company ended 2024 with 2.96 million paid subscribers, up 7% year on year, while 90-day engaged users fell by 3.1%. Cricut's Q4 revenue was $209.3 million, a 9% decline year over year, with full-year revenue reaching $712.5 million. Gross margin for Q4 improved to 44.9%, up from 42% the previous year, and total operating expenses were $80.1 million. Looking forward, Cricut anticipates a decline in operating income for 2025 due to increased marketing, R&D investments, and IP protection actions, with an expected 2-3 percentage point decrease in operating margins. Despite challenges, Cricut remains optimistic about growth in the second half of 2025, driven by new product launches and marketing initiatives.Cricut Inc Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Cricut Inc Reports 8th Year of Profitability in 2024
Positive
Mar 4, 2025
On February 28, 2025, Len Blackwell announced he would not seek re-election to Cricut’s Board of Directors at the 2025 annual meeting, a decision not stemming from any disagreements with the company. Cricut reported its financial results for the fourth quarter and full year of 2024, highlighting an 8th consecutive year of profitability with a net income of $62.8 million, despite a 7% decline in revenue compared to 2023. The company saw growth in paid subscribers and platform revenue, although product revenue decreased. Cricut’s CEO expressed optimism about reaching a growth inflection point, supported by new product launches and strategic investments.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.