- CPI Card Group Inc. refinanced its 2022 debt maturities and is trading at approximately 6x our 2021 cash earnings estimate, which we expect to grow in the future.
- PMTS outperformed our expectations since our report on 1/08/21, and we now believe PMTS could earn $2.80 cash EPS in 2021. A 20x cash EPS multiple implies stock above $50.
- COVID-19 is driving adoption of contactless cards, also known as dual interface, which carry higher (ASPs).
- The change in the credit card replacement cycle that occurred 5 years ago has anniversaried, thereby stabilizing revenue going forward.
- PMTS has several upcoming catalysts over the next several months that could move its shares higher including up-listing to NASDAQ and resumption of sell-side analyst coverage.
For further details see:
CPI Card Group: From Distressed To Levered Growth Company