On November 26, a recent SEC filing unveiled that Don Olsen, EVP at Cricut CRCT made an insider sell.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday outlined that Olsen executed a sale of 30,000 shares of Cricut with a total value of $156,990.

The latest market snapshot at Wednesday morning reveals Cricut shares down by 0.0%, trading at $5.17.

Get to Know Cricut Better

Cricut Inc designs and builds a creativity platform that enables users to turn ideas into professional-looking handmade goods. With its connected machines, design apps and accessories, and materials, the users create everything from personalized birthday cards, mugs, and T-shirts to large-scale interior decorations. It derives revenues from three segments including the Connected machines engaged in the sale of its connected machine hardware and related essential software, the Subscriptions segment provides monthly and annual subscription fees, and the Accessories and Materials segment provides craft, DIY, home decor products and heat presses including the Cricut EasyPress, Cricut Mug Press, and Cricut Autopress.

A Deep Dive into Cricut’s Financials

Negative Revenue Trend: Examining Cricut’s financials over 3 months reveals challenges. As of 30 September, 2024, the company experienced a decline of approximately -4.01% in revenue growth, reflecting a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.

Profitability Metrics:

• Gross Margin: The company sets a benchmark with a high gross margin of 46.08%, reflecting superior cost management and profitability compared to its peers.

• Earnings per Share (EPS): Cricut’s EPS is below the industry average. The company faced challenges with a current EPS of 0.05. This suggests a potential decline in earnings.

Debt Management: Cricut’s debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.02.

Assessing Valuation Metrics:

• Price to Earnings (P/E) Ratio: Cricut’s P/E ratio of 17.83 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.52 is above industry norms, reflecting an elevated valuation for Cricut’s stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry averages at 7.19, Cricut could be considered undervalued.

Market Capitalization Analysis: Falling below industry benchmarks, the company’s market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.

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Why Pay Attention to Insider Transactions

Insider transactions contribute to decision-making but should be supplemented by a comprehensive investment analysis.

When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

Exploring Key Transaction Codes

When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Cricut’s Insider Trades.

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This article was generated by Benzinga’s automated content engine and reviewed by an editor.