Wall Street analysts are high on home crafting device maker Cricut (CRCT). Cricut stock notched a new high Tuesday after getting a slew of upbeat reports. But it soon experienced a nasty reversal in a rough market.
At least five investment banks initiated coverage of Cricut stock on Monday with buy ratings.
The South Jordan, Utah-based company makes devices for cutting and printing craft items like greeting cards, 3D art and labels. Cricut has desktop gadgets that can automatically cut paper, fabrics, leather and balsa wood for various crafts.
In morning trading on the stock market today, Cricut stock surged 6.5% to a record high 24.85. It later reversed during the broader market sell-off. Cricut stock ended the day down 12.8% to 20.35.
Cricut Stock Breaks Out Of IPO Base
On Monday, Cricut stock broke out of an IPO base at a buy point of 21.02, according to IBD MarketSmith charts. Cricut stock went public on March 25 with shares priced at $20.
Cricut describes itself as a creative technology platform company and a lifestyle brand. Its line of smart cutting machines include Cricut Maker, Cricut Explore and Cricut Joy devices. The company has an active community of more than 4 million users worldwide.
“Cricut has created a rapidly growing automated crafting user base around its popular precision cutting machines,” Goldman Sachs analyst Rod Hall said in a note to clients. “In addition, we believe that Cricut’s highly engaged base of automated crafters can be increasingly monetized through subscriptions over time.”
Hall started coverage of Cricut stock with a buy rating and 12-month price target of 35.
Crafting Trend Gets Pandemic Boost
Cricut benefited from an increase in indoor activities such as crafting during the Covid-19 pandemic, Hall said. Cricut’s revenue increased 97% in 2020 after growing 43% in 2019. It posted sales of $959 million in 2020.
Goldman Sachs analyst Katy Huberty said Cricut is well positioned in the fast-growing, $36 billion U.S. traditional crafting market. She rates Cricut stock as overweight with a price target of 23.
Citi analyst Jim Suva initiated coverage of Cricut stock with a buy rating and price target of 25. He likes the fact that Cricut is solidly profitable and is on track for 20% sales growth for multiple years ahead.
The next catalyst for Cricut stock could be the company’s first-quarter earnings report, due out May 13.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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