Cricut Stock Plunges 16.46% After Citi Downgrade

On April 16, 2025, Cricut's stock experienced a significant drop of 16.46% in pre-market trading, reflecting a sharp decline in investor confidence.

Citi has downgraded Cricut from a Neutral to a Sell rating, citing ongoing revenue challenges and a difficult macroeconomic environment. The firm has revised its price target for Cricut from $6 to $4, indicating a bearish outlook for the company's performance in the coming quarters. Citi's analyst Asiya Merchant highlighted that the company's revenue continues to face "stiff headwinds" due to prolonged demand normalization and cautious inventory management by retailers. These factors, combined with the discretionary nature of Cricut's products, make it challenging for the company to achieve growth in sales.

Cricut's plans to boost investments in response to weakening consumer engagement and to enhance innovation in its consumables have been met with skepticism by Citi. The firm expresses concern over the company's ability to execute these initiatives effectively, given the current economic backdrop. This downgrade serves as a bearish signal for Cricut's stock, as analysts often revise their ratings downward when they anticipate further declines in a company's performance.