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CPI Card Group Inc (PMTS)
NASDAQ:PMTS
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CPI Card Group (PMTS) AI Stock Analysis

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PMTS

CPI Card Group

(NASDAQ:PMTS)

Rating:68Neutral
Price Target:
$25.00
▲(19.05%Upside)
CPI Card Group's overall stock score reflects strong sales growth and strategic acquisitions bolstering its market position. However, financial stability concerns due to high leverage and negative equity, along with mixed earnings call results, moderate the overall score. Technical indicators and valuation add some positive aspects but are not enough to outweigh financial risks.
Positive Factors
Investment and Expansion
CPI Card Group is making investments to cater to a broader closed-loop prepaid opportunity and is adding tech and capacity at its Indiana facility.
Market Position
CPI is the fourth largest global card manufacturer and the largest U.S.-based according to Nilson Report.
Revenue Growth
Revenue growth of 21% was driven by higher-value packaging solutions and healthcare payment solutions.
Negative Factors
Gross Margin
Better operating leverage was overshadowed by gross margin softness resulting from a negative product mix.
Valuation
Shares trade at a significant discount to comps despite an EPS growth rate in line with the median peer group.

CPI Card Group (PMTS) vs. SPDR S&P 500 ETF (SPY)

CPI Card Group Business Overview & Revenue Model

Company DescriptionCPI Card Group Inc., together with its subsidiaries, engages in the design, production, data personalization, packaging, and fulfillment of financial payment cards. It operates through Debit and Credit, and Prepaid Debit segments. The Debit and Credit segment produces financial payment cards and provides integrated card services to card-issuing banks. Its products include Europay, Mastercard, And Visa (EMV) and non-EMV financial payment cards and metal cards, as well as private label credit cards. This segment also provides on-demand services and various integrated card services, including card personalization and fulfillment, and instant issuance services. The Prepaid Debit segment primarily offers integrated card services comprising tamper-evident security packaging services to prepaid debit card providers. It also produces financial payment cards issued on the networks of the payment card brands. It serves issuers of debit and credit cards, Prepaid Debit Card program managers, community banks, credit unions, group service providers, and card transaction processors in the United States. The company was formerly known as CPI Holdings I, Inc. and changed its name to CPI Card Group Inc. in August 2015. CPI Card Group Inc. was incorporated in 2007 and is based in Littleton, Colorado.
How the Company Makes MoneyCPI Card Group generates revenue primarily through the production and personalization of payment cards. Its key revenue streams include the sale of secure card products to financial institutions, retailers, and prepaid debit card issuers. The company also earns money by providing related services such as card personalization, data processing, and fulfillment. Additionally, CPI Card Group benefits from strategic partnerships and long-term contracts with major financial institutions and retailers, which contribute to its consistent earnings. The demand for secure, high-quality payment cards and related services drives the company's profitability, as it continues to innovate and expand its offerings to meet market needs.

CPI Card Group Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: -17.13%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While CPI Card Group showed strong sales growth and completed a strategic acquisition with Arroweye Solutions, the company faced challenges with declining adjusted EBITDA, decreased gross margins, and increased production costs. Despite these challenges, the company remains optimistic about customer demand and future growth.
Q1-2025 Updates
Positive Updates
Acquisition of Arroweye Solutions
CPI Card Group announced the acquisition of Arroweye Solutions, a leading provider of digitally-driven on-demand payment card solutions, aiming to expand its market share and diversify its business offerings.
10% Sales Growth
Net sales increased by 10% in the first quarter, driven by strong performance in both debit and credit card segments, and continued growth in prepaid solutions.
Healthy Customer Demand
Despite economic uncertainties, customer demand remains healthy, supporting a positive outlook for mid-to-high single digit growth for net sales and adjusted EBITDA for 2025.
Negative Updates
8% Decline in Adjusted EBITDA
Adjusted EBITDA declined by 8% compared to the previous year due to sales mix issues and increased production costs.
Decreased Gross Margin
Gross profit margin decreased from 37.1% to 33.2% due to negative sales mix and increased production costs.
12% Decrease in Net Income
Net income decreased by 12% primarily due to lower gross profit and higher interest expenses.
Increased Capital Expenditures
Free cash flow was impacted by increased capital spending of $5.3 million, primarily for the new Indiana production facility.
Company Guidance
During the CPI Card Group's Q1 2025 earnings call, the company provided guidance affirming its outlook for mid-to-high single-digit growth in both net sales and adjusted EBITDA for the year. The company reported a 10% increase in net sales for the first quarter, driven by strong performance in debit and credit cards, as well as prepaid solutions. However, adjusted EBITDA declined by 8% due to negative sales mix and increased production costs. Despite these challenges, CPI Card Group remains optimistic about the remainder of the year, focusing on enhancing margins by managing spending and investing strategically, including the recent acquisition of Arroweye Solutions. The acquisition is expected to contribute to revenue and adjusted EBITDA growth over time, although initial integration costs may impact cash flow and margins in 2025. The company's free cash flow was slightly positive for the quarter, and the net leverage ratio stood at 3.1 times. CPI Card Group anticipates that Arroweye's full-year revenue will be in the mid-$50 million range, with low-double-digit adjusted EBITDA margins.

CPI Card Group Financial Statement Overview

Summary
CPI Card Group demonstrates robust revenue growth and profitability with stable cash flow generation. However, the balance sheet is weakened by high leverage and negative equity, posing financial stability risks. The company should focus on improving margins and reducing debt to enhance its financial position.
Income Statement
72
Positive
CPI Card Group shows a consistent revenue growth trajectory with a TTM revenue increase of 2.25% compared to the previous year. The gross profit margin is healthy at 34.42%, and the net profit margin is stable at 3.83%. However, the EBIT margin has slightly decreased to 12.77% from 13.06% the previous year, indicating potential cost pressures. Overall, the income statement reflects solid growth and profitability, though margins could be improved.
Balance Sheet
45
Neutral
The company's balance sheet is concerning with a negative stockholders' equity of -$29.7 million, indicating liabilities exceed assets. The debt-to-equity ratio is not meaningful due to negative equity, highlighting high leverage. The equity ratio is also negative, which poses a risk to financial stability. Despite these challenges, the company maintains a stable asset base with total assets of $351.9 million.
Cash Flow
68
Positive
CPI Card Group's cash flow statement reveals a positive free cash flow of $32.29 million, with a growth rate of -5.19% from the previous year. The operating cash flow to net income ratio is strong at 2.13, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio of 1.71 suggests room for improvement in cash flow management. Overall, cash flow generation is solid, but growth has slowed.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue491.43M480.60M444.55M475.75M375.12M312.19M
Gross Profit169.14M171.22M155.49M175.77M141.43M110.31M
EBITDA106.91M79.21M77.31M93.65M74.56M55.11M
Net Income18.84M19.52M23.98M36.54M15.94M16.13M
Balance Sheet
Total Assets351.91M349.66M293.68M296.67M268.14M266.15M
Cash, Cash Equivalents and Short-Term Investments31.52M33.54M12.41M11.04M20.68M57.60M
Total Debt280.66M289.47M272.31M291.22M303.63M336.71M
Total Liabilities381.63M385.28M345.62M378.74M389.16M404.19M
Stockholders Equity-29.72M-35.62M-51.94M-82.08M-121.02M-138.04M
Cash Flow
Free Cash Flow32.29M34.06M27.64M13.47M10.15M14.92M
Operating Cash Flow40.04M43.31M34.04M31.34M20.23M22.01M
Investing Cash Flow-12.97M-9.22M-6.22M-17.77M-9.92M-7.09M
Financing Cash Flow-12.70M-12.96M-26.44M-23.16M-47.23M23.98M

CPI Card Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price21.00
Price Trends
50DMA
22.32
Negative
100DMA
24.46
Negative
200DMA
26.68
Negative
Market Momentum
MACD
-0.58
Positive
RSI
39.71
Neutral
STOCH
22.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PMTS, the sentiment is Negative. The current price of 21 is below the 20-day moving average (MA) of 22.47, below the 50-day MA of 22.32, and below the 200-day MA of 26.68, indicating a bearish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 39.71 is Neutral, neither overbought nor oversold. The STOCH value of 22.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PMTS.

CPI Card Group Risk Analysis

CPI Card Group disclosed 40 risk factors in its most recent earnings report. CPI Card Group 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

CPI Card Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$2.39B6.8617.91%0.43%5.13%25.93%
77
Outperform
$563.18M-0.62%19.12%75.50%
74
Outperform
$549.55M2.9814.69%0.96%12.45%-36.64%
68
Neutral
$231.83M13.26-36.18%12.81%3.58%
68
Neutral
$7.87B-10.30%34.69%63.65%
62
Neutral
AU$10.03B9.0411.83%4.87%33.36%41.81%
45
Neutral
$422.23M-6.43%-81.66%-214.54%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PMTS
CPI Card Group
21.00
-8.61
-29.08%
GDOT
Green Dot
10.42
0.93
9.80%
YRD
Yiren Digital
6.20
1.75
39.33%
AHG
Akso Health Group Sponsored ADR
2.00
1.00
100.00%
FINV
FinVolution Group
8.94
3.68
69.96%
UPST
Upstart Holdings
83.53
57.48
220.65%

CPI Card Group Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
CPI Card Group Increases Borrowing Capacity to $100 Million
Positive
Jul 7, 2025

On July 2, 2025, CPI Card Group Inc. amended its credit agreement to increase its borrowing capacity from $75 million to $100 million, potentially enhancing its financial flexibility. Additionally, the company announced a redemption of $20 million of its senior secured notes on July 3, 2025, which could impact its debt structure and interest obligations.

The most recent analyst rating on (PMTS) stock is a Buy with a $40.00 price target. To see the full list of analyst forecasts on CPI Card Group stock, see the PMTS Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
CPI Card Group Holds Annual Stockholders Meeting
Neutral
May 22, 2025

On May 21, 2025, CPI Card Group Inc. held its annual meeting of stockholders where three key proposals were considered. The stockholders elected directors for a one-year term, ratified KPMG LLP as the independent registered public accounting firm for 2025, and approved the compensation of the company’s named executive officers. These decisions reflect the company’s ongoing governance and operational strategies, potentially impacting its market positioning and stakeholder relations.

The most recent analyst rating on (PMTS) stock is a Buy with a $40.00 price target. To see the full list of analyst forecasts on CPI Card Group stock, see the PMTS Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
CPI Card Group Acquires Arroweye Solutions for $45.55M
Positive
May 7, 2025

On May 6, 2025, CPI Card Group Inc. completed the acquisition of Arroweye Solutions, Inc., a provider of on-demand payment card solutions, for $45.55 million. This strategic acquisition aims to enhance CPI’s portfolio by integrating Arroweye’s technology-driven solutions, which allow for hyper-personalization and rapid turnaround times, thus expanding CPI’s offerings and market reach. The merger is expected to generate strong returns for CPI and its shareholders, and Arroweye’s revenues are projected to be in the mid-$50 million range for 2025. The acquisition aligns with CPI’s strategy to grow and diversify its offerings, leveraging its resources to increase Arroweye’s market share and customer base.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 09, 2025