CPI Card Group (PMTS 0.69%) stock soared 41.4% through 11:50 a.m. ET Thursday, breaking above a $200 million market capitalization again for the first time this year, despite reporting only mixed results for fiscal Q4 2025.
Heading into the report, analysts forecast the credit card manufacturer to earn $0.69 per share on sales of $145.2 million. In fact, earnings were only $0.62 per share -- but sales raced past expectations to land at $153 million.
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CPI Q4 earnings
Americans love their credit cards. According to recent research from The Motley Fool, 81% of Americans have at least one -- and 31% of us carry four or more! That's good news for CPI, which makes the cards so that banks can hand them out to customers.
CPI's sales surged 22% year over year, driven by debit and credit card sales up 40%... but offset by a 27% decline in the company's smaller prepaid debit card business. Gross profit margins slipped 260 basis points to 31.5%.
Net income grew 9% regardless.
For the full year, CPI reported 13% sales growth, 31.3% gross profit margin (down 430 b.p. from 2024), and a 23% decline in net income. Free cash flow came in substantially ahead of reported net income, however -- $41.3 million, up 21% year over year.
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Key Data Points
Is CPI Card stock a buy?
Valued at $200 million, CPI stock trades for a 5x price-to-free cash flow ratio, which seems cheap. Don't forget to add the company's $265 million in net debt, though, which more than doubles CPI's enterprise value.
To still be a buy after today's share price surge, I'd want to see CPI continue growing FCF in at least the low double-digits. With management predicting "high single-digit" sales growth this year, that's possible... but not guaranteed.
