Axiom Analysts Have Closed Their Short Call On Cimpress

Fiscal Q1 Review

Reviewing the fiscal first quarter results , analyst Victor Anthony noted that the company's revenues, adjusted EBITDA, earnings per share and free cash flow per share all missed estimates, with growth decelerating across business lines and margins compressing. Flooding at the company's Vistaprint production facility led to a 200-basis-point drop in constant currency revenue growth, the analyst noted. According to the analyst, these revenues would now be shifted to the second quarter.

Axiom also noted revenue hit from a reduction in shipping prices and a loss of revenues from partners. The firm attributed the gross margin pressure to shipping reductions and a higher mix of lower-margin upload and print business.

Issues Reflected In Consensus

Although the issues the firm raised in its early June downgrade, namely investment in shipping prices, increased advertising expenses and the wind-down of partner relationships — ramped up investments and slowing growth at U&P — still persist, it said it is less negative now. These issues are properly reflected in the consensus estimates.

Lowering Estimates, Price Target

The firm reduced its 2017 revenue estimate by 1 percent and adjusted EBITDA estimate by 6 percent and its free cash flow estimates to $2.82 from $3.40 per share.

Along with the upward move of its rating to Hold, Axiom also raised its price target to $82 from $80.

At the open, shares of Cimpress were up 1.07 percent at $83.43.