Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.0 |
| P/S | 9.1 |
| EV/EBITDA | 5.5 |
| Fwd P/E | 4.9 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 25.7x
- ▸PEG: 0.37
CRCT · Why this verdict
Why Cricut (CRCT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Cricut is a profitable consumer-hardware brand with a perfect 4-quarter earnings beat streak and high returns on equity, but revenue is shrinking, free cash flow is negative, insiders are selling heavily, and the price of $6.25 is far above the $3.46 analyst target.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is declining 9%, and the latest quarterly revenue of $156.3M is down from $172.1M a year earlier. Growth breakdown | Quarterly revenue should stabilize and return to the $172.0M next-quarter estimate level or higher. | →Stable |
| CounterSales run in a seasonal pattern with the fourth quarter near $200M, so year-over-year comparisons can look weak between peaks, and the growth rank among peers is already at the bottom. | ||
Price of $6.25 is well above the $3.46 analyst target (upside of -44.7%), so there is no analyst-supported upside at the current level. Analyst target | Analyst targets should be raised toward the current price, or the price should fall back toward the target, over the next 12 months. | ↑Improving |
| CounterThe target may be stale after four consecutive large EPS beats, and a forward P/E of 26.4x with a PEG of 0.38 could draw upward revisions. | ||
EPS beat estimates in all 4 of the last 4 quarters, with the latest at $0.19 against a $0.05 estimate, and ROE is an excellent 26%. Last 4 quarters | EPS should keep beating estimates in the report due in 10 days and ROE should stay above 20%. | →Stable |
| CounterThe beats come off very low estimates of $0.03 to $0.05, so large percentage surprises overstate earnings power while revenue is shrinking. | ||
Earnings quality is flagged as a red flag, with free cash flow at -124% of net income despite a Piotroski F-Score of 8/9. Quality breakdown | Free cash flow should turn positive and recover toward 80% of net income. | →Stable |
| CounterNegative free cash flow in a hardware company can come from inventory build ahead of the holiday season, and may reverse in the fourth quarter. | ||
Insiders sold $5.2M of stock across 18 sales over the last 90 days, 0.40% of market cap, with no insider buying. Insider | Insider selling should taper off, with net selling falling below 0.2% of market cap. | ↓Deteriorating |
| CounterSales by founders and early holders are often planned diversification unrelated to the outlook, and institutions are accumulating shares at the same time. | ||
Revenue is declining 9%, and the latest quarterly revenue of $156.3M is down from $172.1M a year earlier.
→StableGrowth breakdown
- Expectation
- Quarterly revenue should stabilize and return to the $172.0M next-quarter estimate level or higher.
CounterSales run in a seasonal pattern with the fourth quarter near $200M, so year-over-year comparisons can look weak between peaks, and the growth rank among peers is already at the bottom.
Price of $6.25 is well above the $3.46 analyst target (upside of -44.7%), so there is no analyst-supported upside at the current level.
↑ImprovingAnalyst target
- Expectation
- Analyst targets should be raised toward the current price, or the price should fall back toward the target, over the next 12 months.
CounterThe target may be stale after four consecutive large EPS beats, and a forward P/E of 26.4x with a PEG of 0.38 could draw upward revisions.
EPS beat estimates in all 4 of the last 4 quarters, with the latest at $0.19 against a $0.05 estimate, and ROE is an excellent 26%.
→StableLast 4 quarters
- Expectation
- EPS should keep beating estimates in the report due in 10 days and ROE should stay above 20%.
CounterThe beats come off very low estimates of $0.03 to $0.05, so large percentage surprises overstate earnings power while revenue is shrinking.
Earnings quality is flagged as a red flag, with free cash flow at -124% of net income despite a Piotroski F-Score of 8/9.
→StableQuality breakdown
- Expectation
- Free cash flow should turn positive and recover toward 80% of net income.
CounterNegative free cash flow in a hardware company can come from inventory build ahead of the holiday season, and may reverse in the fourth quarter.
Insiders sold $5.2M of stock across 18 sales over the last 90 days, 0.40% of market cap, with no insider buying.
↓DeterioratingInsider
- Expectation
- Insider selling should taper off, with net selling falling below 0.2% of market cap.
CounterSales by founders and early holders are often planned diversification unrelated to the outlook, and institutions are accumulating shares at the same time.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.6 |
| ROA | 5.7 |
| Gross margin | 7.1 |
| Op margin | 7.6 |
| Net margin | 6.4 |
| Current ratio | 8.5 |
| FCF quality | 0.0 |
| Moat | 7.2 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 26%
- ▸Earnings quality RED FLAG: -124% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.2 |
| EPS growth | 10.0 |
- ▸Declining revenue: -9%
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.4 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 5.0 |
| Price target | 1.2 |
- ▸Below analyst target
Insider
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 7.5 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $6,368,670 (0.501% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.4 |
| quality rank | 6.6 |
| growth rank | 0.0 |
Technical
8.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.8 |
| support resistance | 8.6 |
| 52w position | 7.9 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.7 |
| days to cover | 3.4 |
| volatility | 4.3 |
| implied vol | 0.3 |
| beta | 10.0 |
| debt equity | 9.9 |
- ▸High IV: 78%
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.7 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 5 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (4)
- MOMENTUM:3.0<4.5
- ASYMMETRY:-6.6=NEGATIVE
- INSIDER:0.50%=EXTREME
- EARNINGS_PROXIMITY:5d<=7d
Warning (0)
none
Reward-to-Risk
-6.59
Upside
-43.2%
Downside
6.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.3B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.0<4.5, ASYMMETRY:-6.6=NEGATIVE, INSIDER:0.50%=EXTREME) reinforce the read. Current asymmetry R:R is -6.59 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.8, Quality at 6.7, and Value at 6.6; the weakest are Momentum at 3.0, Sentiment at 4.3, and Insider at 4.6. The V9 engine flagged 4 failed gates, producing an asymmetric reward-to-risk of -6.59 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Analyst Target Far Below Price
Trip ifAnalyst target rises above $6.60, giving more than 5% upside from the current $6.25.
- P2Perfect Beat Streak High Roe
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Declining Revenue
Trip ifQuarterly revenue falls below $150M from the current $156.3M.
- P4Negative Cash Flow Red Flag
Trip ifFree cash flow rises above 50% of net income from the current -124%.
- P5Heavy Insider Selling
Trip ifNet insider selling over 90 days falls below 0.2% of market cap from the current 0.40%.