CPI Card Group (NASDAQ:PMTS) Posts Earnings Results, Misses Expectations By $0.15 EPS

Key Points

• EPS miss: CPI Card Group reported Q1 EPS of $0.17, missing the $0.32 consensus by $0.15, even as revenue rose 20% to $147.1 million, beating the $134.7M estimate and aided by a $16M contribution from Arroweye.
• Profitability hit: Net income declined 57% to $2.1 million due to roughly $3M of pre‑tax integration costs and higher production expenses (including ~$2M incremental depreciation and $1.2M of tariffs), and gross margin fell to 30.0% from 33.2%.
• Outlook and cash metrics: Management affirmed full‑year guidance while citing growth drivers (expanded Fiserv referral, >15% Integrated PayTech growth, strong contactless/metal demand); Adjusted EBITDA rose 9%, free cash flow was $10.1M, and net leverage improved to just below 3.0x.

CPI Card Group (NASDAQ:PMTS - Get Free Report) issued its quarterly earnings results on Tuesday. The company reported $0.17 earnings per share for the quarter, missing analysts' consensus estimates of $0.32 by ($0.15), FiscalAI reports. CPI Card Group had a net margin of 2.75% and a negative return on equity of 78.82%. The firm had revenue of $147.11 million during the quarter, compared to the consensus estimate of $134.69 million.

Here are the key takeaways from CPI Card Group's conference call:

• Revenue rose 20% to $147 million in Q1, driven by a 35% increase in Secure Card Solutions that included a $16 million contribution from Arroweye.
• Adjusted EBITDA increased 9%, free cash flow was $10.1 million, and net leverage improved to just below 3.0x, while management affirmed its full‑year guidance (high single‑digit revenue growth; low‑ to mid‑single‑digit Adjusted EBITDA growth).
• Net income declined 57% to $2.1 million due to roughly $3 million of pre‑tax integration costs and higher production costs (including ~$2 million of incremental depreciation and $1.2 million of tariffs), and gross margin fell to 30.0% from 33.2%.
• Prepaid Solutions revenue declined 17% in Q1 because of timing of customer orders, which weighed on margins, though management expects sequential improvement and full‑year growth.
• Management highlighted strategic growth drivers — an expanded referral agreement with Fiserv, expected >15% growth in Integrated PayTech (instant issuance/digital), strong contactless/metal demand, and pilots for chip‑embedded prepaid cards — as catalysts for longer‑term growth.

CPI Card Group Stock Performance

Shares of NASDAQ PMTS traded up $0.00 during midday trading on Tuesday, hitting $17.15. The company's stock had a trading volume of 10,093 shares, compared to its average volume of 53,673. CPI Card Group has a 1-year low of $10.81 and a 1-year high of $27.00. The firm's fifty day moving average price is $15.45 and its 200-day moving average price is $14.69. The firm has a market cap of $196.56 million, a P/E ratio of 13.67 and a beta of 1.10.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of PMTS. Wasatch Advisors LP boosted its stake in CPI Card Group by 56.3% during the 2nd quarter. Wasatch Advisors LP now owns 357,754 shares of the company's stock valued at $8,486,000 after purchasing an additional 128,808 shares during the period. Vector Capital Management L.P. boosted its stake in CPI Card Group by 18.6% during the 3rd quarter. Vector Capital Management L.P. now owns 459,314 shares of the company's stock valued at $6,954,000 after purchasing an additional 71,891 shares during the period. Aristeia Capital L.L.C. acquired a new position in CPI Card Group during the 4th quarter valued at about $597,000. Monimus Capital Management LP boosted its stake in CPI Card Group by 131.2% during the 4th quarter. Monimus Capital Management LP now owns 67,257 shares of the company's stock valued at $987,000 after purchasing an additional 38,170 shares during the period. Finally, Creek Drive Management Group LLC acquired a new position in CPI Card Group during the 4th quarter valued at about $440,000. 22.08% of the stock is owned by institutional investors and hedge funds.

Analysts Set New Price Targets

PMTS has been the subject of a number of research analyst reports. Weiss Ratings reiterated a "sell (d+)" rating on shares of CPI Card Group in a report on Monday, April 20th. Wall Street Zen raised shares of CPI Card Group from a "buy" rating to a "strong-buy" rating in a report on Sunday, April 5th. DA Davidson reaffirmed a "buy" rating and issued a $30.00 price target on shares of CPI Card Group in a report on Wednesday, March 11th. Finally, Zacks Research raised shares of CPI Card Group from a "strong sell" rating to a "hold" rating in a report on Monday, January 5th. Three investment analysts have rated the stock with a Buy rating, one has given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus target price of $28.25.

CPI Card Group Company Profile

CPI Card Group, Inc NASDAQ: PMTS is a leading provider of payment, identification and related credential solutions for financial institutions, governments and private enterprises. The company specializes in the design, manufacturing and personalization of secure plastic and metal cards, including EMV chip, magnetic-stripe and contactless cards. CPI Card Group also offers digital credentialing services and cloud-based card management tools that enable real-time controls, mobile wallet integration, fraud monitoring and analytics.

With a focus on security and innovation, CPI Card Group integrates advanced features such as holograms, microprinting, RFID/NFC technology and laser-engraved artwork into its card products.

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