Quad/Graphics (QUAD) AI Stock Analysis

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Quad/Graphics

(NYSE:QUAD)

47Neutral

Quad/Graphics is currently facing significant challenges, including declining revenues, high leverage, and strategic uncertainties. While efforts in debt reduction, strategic innovation, and a high dividend yield are positive, the bearish technical trends and potential impact from executive departures weigh heavily on the stock's outlook.

Positive Factors

Debt Management

Net debt declined year-over-year by $119.8 million, or 26%, to $350.0 million at the end of 2024, showcasing effective debt management.

Financial Health

Quad's leverage ratio was reduced to 1.56x at the end of 2024, indicating improved financial health.

Strategic Partnerships

Quad announced a partnership to utilize Google Cloud’s AI optimization capabilities to create highly-personalized marketing content for clients at scale.

Negative Factors

European Operations

Quad's leverage ratio target was reached despite not closing the European operations sale, which is expected to bring in over $40 million.

Revenue Decline

Q4/24 revenue declined by 10.1% year-over-year to $708.4 million, driven by lower paper sales and print volumes.

Quad/Graphics (QUAD) vs. S&P 500 (SPY)

Market Cap

$260.17M

Dividend Yield4.53%

Average Volume (3M)261.99K

Price to Earnings (P/E)―

Beta (1Y)1.33

Revenue Growth-9.65%

EPS Growth6.43%

CountryUS

Employees12,200

SectorIndustrials

Sector Strength70

IndustrySpecialty Business Services

Share Statistics

EPS (TTM)-1.08

Shares Outstanding39,085,712

10 Day Avg. Volume290,297

30 Day Avg. Volume261,990

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

$10.15

Price Target Upside104.23% 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

Neutral

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.

Balance Sheet

Negative

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.

Cash Flow

Neutral

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price4.97

Price Trends

50DMA

5.96

Negative

100DMA

6.57

Negative

200DMA

5.87

Negative

Market Momentum

MACD

-0.21

Negative

RSI

42.95

Neutral

STOCH

37.00

Neutral

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 4.97 is below the 20-day moving average (MA) of 5.33, below the 50-day MA of 5.96, and below the 200-day MA of 5.87, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 42.95 is Neutral, neither overbought nor oversold. The STOCH value of 37.00 is Neutral, 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
RLGT	70 Outperform	$271.24M	20.36	6.61%	―	-3.33%	29.48%
BBCP	65 Neutral	$300.80M	20.07	5.57%	―	-7.12%	-19.18%
MEC	65 Neutral	$259.94M	10.31	10.78%	―	-1.16%	227.49%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%
SHYF	57 Neutral	$281.20M	―	-1.12%	2.51%	-9.86%	-144.13%
QUAD	47 Neutral	$260.17M	―	-60.09%	4.53%	-9.65%	6.43%

* Industrials Sector Average

Performance Comparison

QUAD

Quad/Graphics

4.97

0.57

12.95%

SHYF

Shyft Group

7.97

-3.15

-28.33%

RLGT

Radiant Logistics

5.80

0.73

14.40%

BBCP

Concrete Pumping Holdings

5.76

-0.56

-8.86%

MEC

Mayville Engineering Company

12.73

-0.89

-6.53%

Quad/Graphics Earnings Call Summary

Earnings Call Date: Feb 18, 2025 | % Change Since: -28.28% | Next Earnings Date: Apr 29, 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

Executive/Board ChangesBusiness Operations and Strategy

Quad/Graphics EVP Eric Ashworth to Depart in May

Negative

Apr 2, 2025

On April 1, 2025, Eric N. Ashworth, Executive Vice President of Product and Market Strategy at Quad/Graphics, announced his intention to leave the company effective May 1, 2025. This departure could impact Quad/Graphics’ strategic direction and market positioning, given Ashworth’s significant role in product and 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.