CompoSecure 2025 Q1 Earnings Misses Targets as Net Income Grows 25.9%

CompoSecure (CMPO) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company exceeded earnings expectations with adjusted EPS of $0.25, surpassing the consensus estimate of $0.19 per share. Despite this earnings beat, CompoSecure's revenue fell short, posting $59.82 million against expectations of $103.22 million. The company's reaffirmed guidance indicates anticipated mid-single-digit growth for the full year of 2025. CompoSecure aims to maintain momentum, supported by strategic initiatives and strong customer engagement. CEO Jon Wilk expressed optimism for sustained growth through the year, emphasizing the benefits already seen from implementing the CompoSecure Operating System (COS).

Revenue

The total revenue of CompoSecure decreased by 42.5% to $59.82 million in 2025 Q1, down from $104.01 million in 2024 Q1.

Earnings/Net Income

CompoSecure's EPS rose 5.0% to $0.21 in 2025 Q1 from $0.20 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $21.49 million in 2025 Q1, marking 25.9% growth from $17.07 million in 2024 Q1. The Company has sustained profitability for 5 years over the corresponding fiscal quarter, reflecting stable business performance. EPS performance is positive, showing growth despite revenue challenges.

Post-Earnings Price Action Review

The strategy of buying CompoSecure (CMPO) shares after their revenue increase quarter-over-quarter on the financial report release date and holding for 30 days resulted in a 10.91% return over the past five years. However, this performance significantly underperformed the benchmark, which delivered a 54.17% return during the same period. The strategy's Sharpe ratio was low at 0.05, indicating poor risk-adjusted returns, and it experienced a maximum drawdown of -60.08%, underscoring its high risk. Additionally, the volatility was measured at 47.36%, adding to the strategy's overall risk profile. Despite these challenges, CompoSecure's stock price has shown some upward movement, with a 0.93% increase during the latest trading day, a 5.69% rise over the most recent full trading week, and a 13.13% jump month-to-date.

CEO Commentary

Jon Wilk - President and Chief Executive Officer: "We started the year in line with our expectations... consolidated net sales essentially flat compared to prior year." He highlighted the strong program activity with high-profile customers and emphasized the importance of the CompoSecure Operating System (COS) in driving operational excellence and efficiencies. Wilk expressed optimism about momentum building in the second quarter, stating, "we anticipate this sustained growth trajectory will carry through the remainder of the year." He noted the benefits already seen from implementing COS and acknowledged macroeconomic challenges, maintaining a focus on strategic investments and customer relationships to build long-term value.

Guidance

CompoSecure reaffirms its full-year 2025 guidance, expecting mid-single-digit growth in both consolidated net sales and pro forma adjusted EBITDA. Wilk stated, "we are seeing the activity levels, the orders, the backlog to help support that full year forecast." This guidance includes the management fee to Resolute Holdings, with expectations for continued growth momentum through the year.

Additional News

CompoSecure, Inc. has seen notable insider activity recently, with Director Joseph J. Deangelo purchasing 45,045 shares of the company's stock, representing a significant increase in ownership. Additionally, Director Resolute Compo Holdings LLC acquired 233,070 shares, reflecting a strategic investment in the company's future. CompoSecure has also reiterated its full-year consolidated earnings guidance for 2025, maintaining expectations for mid-single-digit growth in net sales with sales momentum building through the year. These actions demonstrate confidence in the company's strategic direction and growth potential amidst a challenging macroeconomic environment.

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