Sell Alert: Arora Ashish Cashes Out $1.93M In Cricut Stock

Revealing a significant insider sell on May 14, Arora Ashish, Chief Executive Officer at Cricut CRCT, as per the latest SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday outlined that Ashish executed a sale of 267,936 shares of Cricut with a total value of $1,932,558.

As of Wednesday morning, Cricut shares are down by 0.4%, currently priced at $7.45.

All You Need to Know About Cricut

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.

Breaking Down Cricut's Financial Performance

Negative Revenue Trend: Examining Cricut's financials over 3 months reveals challenges. As of 31 March, 2024, the company experienced a decline of approximately -7.63% 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.

Key Profitability Indicators:

• Gross Margin: Achieving a high gross margin of 54.72%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 0.09, Cricut showcases strong earnings per share.

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

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: Cricut's stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 25.79.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 2.18 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 10.71, Cricut presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

The Impact of Insider Transactions on Investments

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

From a legal standpoint, the term "insider" pertains to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as outlined in Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and significant hedge funds. These insiders are mandated to inform the public of their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

A company insider's new purchase is a indicator of their positive anticipation for a rise in the stock.

While insider sells may not necessarily reflect a bearish view and can be motivated by various factors.

Unlocking the Meaning of Transaction Codes

Surveying the realm of stock transactions, investors often give prominence to those unfolding in the open market, systematically detailed in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C denotes 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.

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