PMTS - CPI Card Group: Still Attractive After Q1 Profitability Lag

2025-05-22 23:00:11 ET

Summary

• CPI Card Group's Q1 results were quite weak. Good sales growth was offset by a significant decline in the gross margin. The 2025 guidance should be taken with some caution.
• The recent Arroweye acquisition is fair. While coming at an EV/EBITDA higher than CPI Card Group's own, sales and cost synergies should offset the fact.
• After the stock's crash, PMTS stock is very attractively priced. I estimate a 65% upside to $33.00.

CPI Card Group Inc. ( PMTS ) reported the company's Q1 results on the 7th of May. The quarter's results were mixed—while the payment card company reported revenues slightly above Wall Street's consensus , profitability had a major hiccup, causing a very notable EPS miss. The company also announced the acquisition of Arroweye....

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