Cantaloupe (CTLP) AI Stock Analysis

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Cantaloupe

(NASDAQ:CTLP)

72Outperform

Cantaloupe is positioned well in the Information Technology Services industry, with strong financials and optimistic earnings guidance. However, technical indicators suggest caution due to bearish trends. Valuation concerns with a high P/E ratio and lack of dividends also weigh on the score. Despite these factors, continued revenue growth and strategic initiatives provide a positive outlook.

Positive Factors

Financial Performance

CTLP reported Q2/25 revenue of $73.7 million representing an increase of 12.8% year-over-year with adjusted EBITDA of $10.7 million representing a 25.7% increase.

Growth Opportunities

CTLP profiles as an attractive candidate for private equity firms, especially considering its strong recurring cash flow, a nearly debt-free balance sheet, and multiple avenues for growth including expansion efforts in Europe and Latin America.

Market Position

CTLP is positioned to benefit from increased adoption of self-service options by retailers and their frustration with growing levels of shoplifting.

Negative Factors

Market Valuation

The value of CTLP's integrated payment solutions, strong recurring cash flow, and expanding margins have yet to be reflected in its share price, suggesting it remains undervalued.

Revenue Expectations

CTLP reported 2Q25 revenue of $73.7m, up 12.8% year-over-year, but it trailed the consensus estimate.

Cantaloupe (CTLP) vs. S&P 500 (SPY)

Market Cap

$575.51M

Dividend YieldN/A

Average Volume (3M)426.40K

Price to Earnings (P/E)39.5

Beta (1Y)0.86

Revenue Growth12.88%

EPS Growth2.89%

CountryUS

Employees348

SectorTechnology

Sector Strength63

IndustryInformation Technology Services

Share Statistics

EPS (TTM)0.20

Shares Outstanding73,034,580

10 Day Avg. Volume286,546

30 Day Avg. Volume426,399

Financial Highlights & Ratios

PEG Ratio13.67

Price to Book (P/B)N/A

Price to Sales (P/S)2.02

Price to Cash Flow (P/CF)276.70

P/FCF Ratio1526.56

Enterprise Value/Market Cap1.27

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit7.96

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.63

Price Target Upside60.28% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Cantaloupe Business Overview & Revenue Model

Company DescriptionCantaloupe, Inc., a digital payment and software services company, provides technology solutions for the unattended retail market. The company offers integrated solutions for payments processing, logistics, and back-office management. It also provides ePort, an integrated payment device that is deployed in self-service, unattended market applications, such as vending, amusement, arcade, commercial laundry, air/vacuum, car wash, and others, which facilitates digital payments; and integrated software services for payment devices in the field for the wireless transfer. The company serves vending machine, car wash, electric vehicle charging, amusement, commercial laundry, micro-market, kiosk, and entertainment companies. It has strategic partnership with Bakkt Holdings, LLC to bring a cashless experience for consumers to spend digital assets at unattended retail devices: and Castles Technology to introduce a next-generation cashless device solution. The company was formerly known as USA Technologies, Inc and changed its name to Cantaloupe, Inc. Cantaloupe Inc. was incorporated in 1992 and is headquartered in Malvern, Pennsylvania.

How the Company Makes MoneyCantaloupe makes money primarily through the sale of its hardware and software solutions, which include smart vending technology, payment processing systems, and data analytics services. The company generates revenue by selling its products and services directly to operators in the unattended retail industry, who use these solutions to streamline their operations and increase sales. Additionally, Cantaloupe earns income through transaction fees associated with its payment processing services, which facilitate cashless payments at vending machines and other unattended retail locations. Key partnerships with payment processors and technology providers further enhance Cantaloupe's earning potential, allowing it to offer integrated solutions that appeal to a wide range of clients in the retail sector.

Cantaloupe Financial Statement Overview

Summary

Cantaloupe demonstrates strong financial health with consistent revenue growth and efficient operations reflected in its income statement. The balance sheet is robust, with minimal leverage and a solid equity base, reducing financial risks. While cash flow generation from operations is positive, the company needs to improve its free cash flow position to enhance financial flexibility. Overall, Cantaloupe is well-positioned for continued growth in the software industry.

Income Statement

Very Positive

Cantaloupe's TTM data shows a strong performance with a Gross Profit Margin of 54.04% and a Net Profit Margin of 5.40%. The company's revenue has grown significantly over the years, with a recent growth rate of 6.15% from the previous year. EBIT and EBITDA margins are healthy at 6.66% and 10.36%, respectively, indicating operational efficiency. The company has shown consistent revenue growth, which is a positive sign for future prospects.

Balance Sheet

Positive

The balance sheet reflects a solid financial position with a low Debt-to-Equity Ratio of 0.01, indicating minimal leverage. The Return on Equity is 8.10%, suggesting effective use of equity to generate profits. An Equity Ratio of 62.75% demonstrates a strong capital structure. The company maintains a good balance between debt and equity, reducing financial risk.

Cash Flow

Positive

Cantaloupe's cash flow performance highlights a positive Operating Cash Flow to Net Income Ratio of 1.13, suggesting good cash generation from operations. However, the Free Cash Flow to Net Income Ratio is much lower at 0.02, indicating limited free cash resources after capital expenditures. The Free Cash Flow Growth Rate is negative, showing potential room for improvement in cash management.

Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
268.60M	243.64M	195.20M	166.94M	163.15M
	Gross Profit
92.08M	81.24M	54.20M	54.03M	46.27M
	EBIT
14.17M	760.00K	-993.00K	-4.32M	-18.30M
	EBITDA
28.12M	11.95M	4.33M	1.19M	-28.58M
	Net Income Common Stockholders
11.99M	633.00K	-1.70M	-8.71M	-40.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
58.92M	50.93M	68.13M	88.14M	31.71M
	Total Assets
335.57M	289.61M	255.63M	237.67M	181.02M
	Total Debt
47.33M	40.93M	16.99M	17.96M	20.51M
	Net Debt
-11.59M	-9.99M	-51.14M	-70.17M	-11.20M
	Total Liabilities
151.10M	122.02M	95.66M	83.14M	79.67M
	Stockholders Equity
184.47M	167.59M	159.97M	154.53M	101.35M
Cash Flow		Free Cash Flow
12.81M	-1.96M	-17.96M	6.34M	-16.68M
	Operating Cash Flow
27.75M	14.19M	-8.71M	8.18M	-14.14M
	Investing Cash Flow
-18.64M	-51.87M	-12.23M	-1.83M	-2.49M
	Financing Cash Flow
-1.06M	20.48M	920.00K	50.07M	20.88M

Cantaloupe Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price7.88

Price Trends

50DMA

8.53

Negative

100DMA

8.78

Negative

200DMA

8.27

Negative

Market Momentum

MACD

-0.14

Negative

RSI

50.69

Neutral

STOCH

80.58

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTLP, the sentiment is Neutral. The current price of 7.88 is above the 20-day moving average (MA) of 7.65, below the 50-day MA of 8.53, and below the 200-day MA of 8.27, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 50.69 is Neutral, neither overbought nor oversold. The STOCH value of 80.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CTLP.

Cantaloupe Risk Analysis

Cantaloupe disclosed 31 risk factors in its most recent earnings report. Cantaloupe 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

Cantaloupe Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLMB	76 Outperform	$501.75M	26.85	21.95%	0.62%	32.27%	48.97%
CTLP	72 Outperform	$575.51M	39.46	8.36%	―	12.88%	2.89%
LYTS	66 Neutral	$444.93M	20.81	10.42%	1.34%	17.89%	-23.37%
RPAY	63 Neutral	$415.32M	―	-1.29%	―	5.53%	90.89%
Sector *	59 Neutral	$10.73B	10.11	-6.65%	3.02%	7.41%	-11.17%
FARO	57 Neutral	$604.86M	―	-0.34%	―	-4.76%	97.93%
PRTH	45 Neutral	$584.47M	―	57.39%	―	16.42%	50.85%

* Technology Sector Average

Performance Comparison

CTLP

Cantaloupe

7.88

1.99

33.79%

FARO

Faro Technologies

31.46

12.42

65.23%

LYTS

Lsi Industries

14.87

0.03

0.20%

CLMB

Climb Global Solutions

109.14

41.88

62.27%

RPAY

Repay Holdings

4.41

-5.67

-56.25%

PRTH

Priority Technology Holdings

7.35

4.15

129.69%

Cantaloupe Earnings Call Summary

Earnings Call Date:Feb 06, 2025

(Q2-2025)

% Change Since: -9.11%|

Next Earnings Date:May 08, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong revenue growth, improved gross margins, and increased EBITDA, driven by successful expansions in micro markets and smart stores, as well as international wins. However, there were challenges such as a decline in equipment revenue and increased operating expenses. Overall, the positive aspects outweighed the negatives, leading to a generally optimistic outlook.

Q2-2025 Updates

Positive Updates

Significant Revenue Growth

Total revenue increased 13% year over year to $73.7 million, driven by 17% year-over-year transaction revenue growth and 14% year-over-year subscription revenue growth.

Improved Gross Margins

Total adjusted gross margin for the quarter was 41.7%, compared to 37.2% in the same quarter last year.

Increased EBITDA

Adjusted EBITDA for Q2 was $10.7 million, a 26% increase compared to the prior year.

Expansion in Micro Markets and Smart Stores

Continued growth in micro markets and smart store deployments, including a new agreement with Premier Foodservice and significant sales in the Smart Store series.

New International Wins

Secured new international customers in the UK and Mexico, expanding the company's footprint outside the US.

Launch of Cantaloupe Capital

Launched microlending services to help customers expand their business, aimed at addressing capital constraints for SMBs.

Strong Point of Sale Implementation

Added the San Jose Earthquakes at PayPal Park as a point of sale provider, including a suite management platform for stadium guest experiences.

Negative Updates

Decline in Equipment Revenue

Equipment revenue was $8.6 million, a decrease of 7% compared to Q2 FY2024.

Increased Operating Expenses

Total operating expenses in Q2 FY2025 increased to $24.5 million compared to $20.7 million in Q2 FY2024, largely due to expenses from recent acquisitions.

Cash and Cash Equivalents Decrease

Ended the second quarter with cash and cash equivalents of $27.7 million, a decrease from the year-ending balance as of June 30, 2024.

Company Guidance

During Cantaloupe's fiscal year 2025 second-quarter earnings call, several key metrics were highlighted. The company reported a 13% year-over-year increase in total revenue, reaching $73.7 million, driven by 17% growth in transaction revenue and 14% growth in subscription revenue. The adjusted gross margin improved to 41.7% from 37.2% the previous year. Adjusted EBITDA rose 26% to $10.7 million. The company also noted an increase in active customers to over 32,000 and 1.3 million active devices. Equipment revenue, however, saw a 7% decline. Cantaloupe reaffirmed its fiscal year 2025 guidance, projecting total revenues between $308 million and $322 million, and adjusted EBITDA between $44 million and $52 million. The company continues to focus on scaling operations internationally and refining its go-to-market strategy.

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.