PMTS Stock Forecast & Price Target

CPI Card Group Inc. demonstrated notable growth with a 27% increase in PMTS revenue for 2022, significantly outpacing historical trends. The Prepaid Debit segment is projected to show an 8% year-over-year revenue growth, reaching $23 million, indicating a solid demand for prepaid solutions. Additionally, despite the anticipated modest contraction in margins, adjusted EBITDA is expected to rise 3% year-over-year to $92 million, reflecting overall operational efficiency and growth potential within the company's core segments.

CPI Card Group Inc. is facing a negative outlook primarily due to increased pressure on adjusted EBITDA margins, which have declined by 120 basis points year-over-year to 18.1%, exacerbated by anticipated increments in selling, general, and administrative expenses. Additionally, the company's expected free cash flow for 2024 is projected to decrease by approximately 50% compared to the previous year, and there has been a notable reduction in the 2025 earnings per share estimate from $2.74 to $2.45, influenced by rising depreciation and interest expenses. Although the net leverage ratio has improved slightly, it remains elevated at 2.9x trailing adjusted EBITDA, with improvements largely attributed to EBITDA growth rather than a decrease in outstanding debt, indicating potential financial strain ahead.