Why Cimpress Stock Broke Down on Thursday

Shares of Cimpress (NASDAQ: CMPR) had a bad day on Thursday. The company behind print-on-demand services such as VistaPrint, Printi, and BuildASign reported mixed results on Wednesday evening. The stock opened Thursday's trading 23.8% lower, though it recovered to a total drop of 9.3% by the end of the day.

Cimpress' Q1 2025 by the numbers

For the first quarter of fiscal year 2025, your average analyst expected earnings of approximately $0.29 per share on revenue near $799 million. Cimpress missed the bottom-line target with a net loss of $0.50 per share, though sales rose 6% year over year to $805 million.

The company saw rising sales across all five of its reportable business groups, but operating profits fell in the Vista and PrintBrothers divisions. Further down the income statement, accelerated interest payments on refinanced debt resulted in deeply negative earnings. Jumping to the cash-flow statement, free cash flows shrank due to unfavorable year-over-year comparisons of product inventory levels. The refinancing charges also played a role here.

Is the stock a good investment today?

Looking ahead, Cimpress' management expects relatively soft second-quarter results due to calendar effects and the U.S. election. Beyond that, the business should show profitable growth in the long term. The refinancing expenses are not coming back, after all.

On the earnings call, CEO Robert Keane explained his company's active stock buyback program, saying, "Right now, I think Cimpress is a case study or a poster child of Benjamin Graham's description of Mr. Market when he gets especially moody and irrational."

So Cimpress will continue to buy back stock while the shares are cheap, and investors outside the company should probably consider a similar approach. The stock is down 22% over the last quarter, trading at the modest valuation ratios of 10.7 times earnings and 0.5 times sales. Don't bet the farm on this stock -- or any other single investment -- but Cimpress could be a helpful addition to any growth-oriented stock portfolio at these low share prices.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.