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Quad/Graphics, Inc. Class A (QUAD)
NYSE:QUAD
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Quad/Graphics
(NYSE:QUAD)
46Neutral
Positive Factors
Financial Health
Net debt declined YOY by $119.8 million, or 26%, to $350.0 million at the end of 2024, as the company produced free cash flow of $55.7 million and generated $71.3 million from asset sales.
Strategic Focus
Agreement to sell most of European business operations increases strategic focus, with proceeds intended for debt reduction and investment in marketing solutions.
Negative Factors
Revenue Decline
Q4/24 revenue declined -10.1% YOY to $708.4 million, driven by lower paper sales and lower print volumes, including the impact from client mix and increased gravure volume.
Quad/Graphics (QUAD) vs. S&P 500 (SPY)
Market Cap
$287.39M
Dividend Yield4.1%
Average Volume (3M)355.39K
Price to Earnings (P/E)―
Beta (1Y)1.69
Revenue Growth-9.65%
EPS Growth6.43%
CountryUS
Employees13,150
SectorIndustrials
Sector Strength72
IndustryCorporate Services
Share Statistics
EPS (TTM)-1.08
Shares Outstanding39,085,712
10 Day Avg. Volume343,839
30 Day Avg. Volume355,388
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.11
Price to Cash Flow (P/CF)0.50
P/FCF Ratio0.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.15Price Target Upside83.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Quad/Graphics Business Overview & Revenue Model
Company DescriptionQuad/Graphics (QUAD) is a prominent marketing solutions provider that offers a diverse array of services designed to enhance the effectiveness of its customers’ marketing endeavors. The company operates within sectors such as print and related services, including marketing strategy, media planning and placement, creative and photography services, and data and analytics. Quad/Graphics works with a variety of industries, delivering both digital and print solutions to help clients optimize their marketing spend and achieve their business goals.
How the Company Makes MoneyQuad/Graphics generates revenue primarily through its comprehensive marketing solutions, which encompass a wide range of services from print production to full-service marketing support. The company earns money by providing high-volume, high-quality print services, such as catalogs, magazines, direct mail, and retail inserts, which are all key components of its revenue stream. Additionally, Quad/Graphics offers integrated marketing services that include media planning and placement, creative services, and campaign analytics, further diversifying its revenue sources. Partnerships with major industries, including retail, healthcare, and publishing, contribute significantly to the company's financial success, as these collaborations allow Quad/Graphics to leverage its extensive capabilities to deliver customized solutions that meet the unique needs of each client.
Quad/Graphics Financial Statement Overview
Summary
Quad/Graphics is facing financial challenges with declining revenues, ongoing losses, and high leverage. Although cash flows remain positive, the company's strained financial position requires strategic adjustments.Income Statement
Quad/Graphics has faced declining revenue over recent years, with a significant drop from 2020 to 2024. The net profit margin is negative, indicating ongoing losses, despite a decrease in net loss from 2023 to 2024. Gross profit margins have also suffered due to declining revenues, impacting profitability.45
Neutral
Balance Sheet
The company exhibits a high debt-to-equity ratio, reflecting significant leverage, which could pose financial risks. The equity ratio is low, indicating limited equity financing. Quad/Graphics has seen declining stockholders' equity over time, reducing financial stability.40
Negative
Cash Flow
Operating cash flow remains positive, but free cash flow has decreased from 2023 to 2024. The ratio of operating cash flow to net income is healthy, showing strong cash generation relative to reported net losses. However, declining free cash flow growth is a concern.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.67B | 2.96B | 3.22B | 2.96B | 2.93B | Gross Profit |
| 2.67B | 576.50M | 598.20M | 570.50M | 594.80M | EBIT |
| 19.20M | 25.70M | 110.90M | 92.80M | 88.60M | EBITDA |
| 122.50M | 150.60M | 252.20M | 245.60M | 150.40M | Net Income Common Stockholders |
| -50.90M | -55.40M | 9.30M | 37.80M | -106.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 29.20M | 52.90M | 25.20M | 179.90M | 55.20M | Total Assets |
| 1.30B | 1.51B | 1.70B | 1.89B | 1.93B | Total Debt |
| 464.60M | 625.30M | 685.10M | 931.60M | 1.01B | Net Debt |
| 435.40M | 572.40M | 659.90M | 751.70M | 955.90M | Total Liabilities |
| 1.25B | 1.39B | 1.53B | 1.75B | 1.84B | Stockholders Equity |
| 49.90M | 119.50M | 172.90M | 136.80M | 84.10M |
| Cash Flow | Free Cash Flow | |||
| 55.70M | 76.80M | 94.30M | 86.50M | 129.20M | Operating Cash Flow |
| 112.90M | 147.60M | 154.60M | 136.50M | 190.20M | Investing Cash Flow |
| 12.70M | -46.40M | -60.50M | 129.40M | 9.70M | Financing Cash Flow |
| -149.10M | -73.60M | -248.70M | -140.90M | -223.60M |
Quad/Graphics Technical Analysis
Negative
5.54
Price Trends
6.58
Negative
6.77
Negative
5.81
Negative
Market Momentum
-0.33
Positive
38.44
Neutral
16.03
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QUAD, the sentiment is Negative. The current price of 5.54 is below the 20-day moving average (MA) of 6.34, below the 50-day MA of 6.58, and below the 200-day MA of 5.81, indicating a bearish trend. The MACD of -0.33 indicates Positive momentum. The RSI at 38.44 is Neutral, neither overbought nor oversold. The STOCH value of 16.03 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for QUAD.
Quad/Graphics Risk Analysis
Quad/Graphics disclosed 29 risk factors in its most recent earnings report. Quad/Graphics 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
Quad/Graphics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $722.44M | 13.86 | 8.61% | 7.33% | -3.22% | 99.58% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% | |
59 Neutral | $603.05M | ― | -0.42% | 3.73% | -3.89% | -106.78% | |
49 Neutral | $779.46M | ― | -5.12% | 0.77% | 4.96% | -94.10% | |
48 Neutral | $473.05M | ― | -11.19% | ― | -5.79% | -10.12% | |
46 Neutral | $287.39M | ― | -60.09% | 4.10% | -9.65% | 6.43% |
* Industrials Sector Average
Performance Comparison
QUAD
Quad/Graphics
5.54
0.81
17.12%
DLX
Deluxe
15.84
-2.31
-12.73%
SCHL
Scholastic
20.89
-15.38
-42.40%
GCI
Gannett
3.28
1.24
60.78%
EEX
Emerald Expositions Events
3.72
-2.07
-35.75%
Quad/Graphics Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -20.06% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The call highlighted significant achievements in debt reduction, increased profitability margins, and strategic investments in data and technology. However, these positives were balanced by challenges such as declining net sales, the impact of losing a major client, and external pressures from postal rates and potential tariffs. Despite these challenges, the company is actively pursuing growth opportunities and innovations.Highlights
Increased Adjusted EBITDA Margin
Adjusted EBITDA margin improved by 48 basis points from 7.9% to 8.4% in 2024, primarily due to benefits from improving manufacturing productivity and cost reduction initiatives.
Debt Reduction Success
Net debt was reduced by $120 million in 2024 and by $684 million from 2020 to 2024, representing a 66% reduction.
Dividend Increase
The quarterly dividend was increased by 50% to $0.075 per share or $0.30 per share on an annualized basis.
Strong Performance of Data Stack
Quad's proprietary data stack is linked to 250 million consumers and represents 97% of the adult US population, driving significant business opportunities.
Launch of At Home Connect
A new platform modernizing direct mail with trigger-based personalized direct mail informed by online consumer interactions.
Lowlights
Decline in Net Sales
Net sales declined by 10.1% in the fourth quarter of 2024 compared to the same period in 2023, and by 9.7% for the full year.
Loss of Large Grocery Client
Lower agency solution sales were impacted by the loss of a large grocery client, contributing to the decline in net sales.
Paper and Postal Rate Challenges
Lower paper sales and lower print volumes were affected by postal rate increases and elevated interest rates, impacting financial services direct mailings.
Potential Tariff Impact
Concerns were raised about potential tariffs on paper imports from Canada, which could impact client demand and increase costs.
Company Guidance
During Quad's Fourth Quarter and Full Year 2024 Conference Call, the company provided extensive guidance for 2025. Quad expects organic net sales to decline by 2% to 6% compared to 2024, excluding the $153 million anticipated from the divestiture of European operations. The projected decline is an improvement over the 9.7% drop from 2023 to 2024, with expected growth in higher-margin offerings such as agency solutions and international print, particularly in Mexico. Adjusted EBITDA is forecasted between $180 million and $220 million, with a margin similar to 2024 at around 8.3%. Free cash flow is estimated to be between $40 million and $60 million, a decrease from 2024 due to higher capital expenditures and the divestiture of European operations. Quad plans to increase investments in innovation and maintain a low net debt leverage ratio of approximately 1.5 times by the end of 2025.Quad/Graphics Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
Quad/Graphics to Showcase Transformation in Investor Presentation
Positive
Nov 20, 2024
Quad/Graphics, Inc. is set to host an investor presentation focusing on its transformation into a marketing experience company, highlighting its continuous innovation and product development. The company aims to enhance marketing efficiencies through its MX Solutions Suite, drive financial growth, and expand its service offerings with AI-backed personalized content solutions. Investors can access the presentation online, with a recorded replay available for later viewing.
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.