Cimpress plc CMPR is poised to gain from strength across its Vista, National Pen and Upload & Print segments. The company's effective cost-control measures add to its appeal.

Cimpress is an online provider of premium graphic design services and personalized printed products, catering to small businesses and consumers. The company’s product range includes business cards, brochures, websites, e-commerce platforms, calendars, address labels, notepads, signage and others.

CMPR currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 1.8%. CMPR belongs to Zacks Consumer Services - Miscellaneous industry.

Image Source: Zacks Investment Research

Let’s discuss the factors that should influence investors to retain this company for the time being.

Business Strength: Cimpress is witnessing positive momentum across its Vista, National Pen, and Upload & Print segments. CMPR’s focus on technology investments and product innovation, combined with rising order volumes and higher average order values, positions it well for continued growth. Improvements in customer experience and the introduction of new products are benefiting the Vista segment. An increase in customer numbers and higher revenue per customer also bode well. The segment is expected to gain from the seasonal consumer volume spike in the near quarter.

The National Pen segment is experiencing significant growth driven by e-commerce channels. Rising order rates are aiding CMPR’s Upload & Print segment.

Cost-Control Measures: Cimpress' effective cost-control strategies are boosting its margin performance. In the first quarter of fiscal 2025 (ended September 2024), gross profit rose 6.4% year over year to $382 million, with the margin remaining stable at 47%.

Scale of Operation: CMPR’s large-scale operations provide small business customers with access to high-quality products and printing services that may otherwise be beyond their reach. The company’s product line has expanded to offer a broad range of solutions to meet customers' marketing needs. The PrintBrothers businesses are continuing to adopt technologies integrated into CMPR’s mass customization platform. Cimpress is also restructuring its operations by streamlining product development teams and consolidating those previously focused on similar activities. This move is anticipated to enhance customer value and improve operational efficiency in the long term.

Downsides of CMPR Stock

High Costs: The company has been dealing with the adverse impacts of high cost of revenues and operating expenses. The cost of revenues increased 6% in the first quarter of fiscal 2025 on a year-over-year basis due to increasing production and shipping costs. General and administrative expenses rose 7.5% year over year in the fiscal first quarter due to higher travel and training costs and consulting spending. The company is persistently bearing the brunt of input cost inflation. Escalation in costs, if not controlled, can severely affect margins and profitability in the quarters ahead.

Forex Woes: CMPR’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar is likely to require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry.

Stocks to Consider

Better-ranked companies are discussed below.

Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has remained steady.

H&R Block, Inc. HRB presently carries a Zacks Rank #2 (Buy). HRB delivered a trailing four-quarter average earnings surprise of 9.9%.

In the past 60 days, the Zacks Consensus Estimate for HRB’s fiscal 2025 earnings has increased 0.6%.

Applied Industrial Technologies AIT presently carries a Zacks Rank of 2. AIT delivered a trailing four-quarter average earnings surprise of 5%.

In the past 60 days, the consensus estimate for AIT’s fiscal 2025 earnings has inched up 0.1%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report

H&R Block, Inc. (HRB) : Free Stock Analysis Report

Graham Corporation (GHM) : Free Stock Analysis Report

Cimpress plc (CMPR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research