CMPO: Margin Expansion And Husky Acquisition Will Drive Future Share Price Strength

Analysts have nudged their blended price target for CompoSecure slightly higher, from roughly $25.17 to $25.50. They point to sustained margin expansion, faster organic growth and incremental value from the Husky Technologies acquisition as key drivers.

Analyst Commentary

Recent Street research has turned more constructive on CompoSecure, with multiple firms lifting ratings and price targets as they reassess the company’s growth profile, execution, and the strategic implications of the Husky Technologies acquisition.

Bullish Takeaways

• Bullish analysts highlight sustained margin expansion and stronger organic growth as key reasons for raising price targets, viewing these trends as supportive of a higher earnings power and valuation multiple.
• Several models have been revised upward following better than expected Q3 results on both revenue and profitability, reinforcing confidence that management can execute against guidance and deliver upside to current forecasts.
• The acquisition of Husky Technologies is seen as a value accretive catalyst, with potential synergies and cross selling opportunities that could enhance long term growth and diversify CompoSecure’s revenue mix.
• Analysts also point to robust card growth across the customer base and the early ramp of fintech offerings as underappreciated drivers that may sustain above market growth through at least 2026.

Bearish Takeaways

• More cautious voices, including JPMorgan despite its upgrade to Neutral, indicate that the risk reward is more balanced at current levels, especially after the recent run up in the stock and higher expectations embedded in consensus estimates.
• Some bearish analysts remain focused on execution risk tied to integrating Husky Technologies, warning that realizing the full synergy potential will require disciplined capital allocation and operational oversight.
• There is lingering concern that parts of the growth narrative, such as crypto related initiatives and newer fintech products, may be volatile or slower to scale, which could pressure valuation if adoption lags optimistic assumptions.
• A subset of the Street also cautions that CompoSecure’s improved margin profile must prove durable through different macro cycles, noting that any reversal in demand trends or pricing power could lead to multiple compression.

What's in the News

• Needham raised its price target on CompoSecure shares to $22 from $18 and reiterated a Buy rating, citing strong card growth expected to persist through at least 2026 and the early ramp of recently launched fintech offerings (Periodicals).
• CompoSecure appointed Mary Holt as Chief Financial Officer, succeeding retiring CFO Tim Fitzsimmons. Holt brings more than 30 years of financial leadership experience from Honeywell, Warren Equity Partners, Pfizer, and Arthur Andersen (Key Developments).
• The company completed a share repurchase tranche, buying back 647,782 shares, or 0.63 percent of outstanding shares, for a total of $12.24 million under the buyback program announced on March 6, 2024 (Key Developments).
• CompoSecure was removed as a constituent from the NASDAQ Composite Index. This change alters its index fund and passive ownership profile (Key Developments).
• A special or extraordinary shareholders meeting has been scheduled for December 23, 2025. This may signal potential shareholder votes on strategic or governance matters (Key Developments).

Valuation Changes

• Fair Value: nudged higher from approximately $25.17 to $25.50, reflecting a modest upward reassessment of intrinsic value.
• Discount Rate: effectively unchanged, ticking up only slightly from about 8.20 percent to 8.20 percent, indicating a stable risk profile.
• Revenue Growth: revised marginally higher from roughly 68.01 percent to 68.02 percent, signaling a very small increase in long term growth expectations.
• Net Profit Margin: trimmed slightly from about 50.28 percent to 50.28 percent, implying a nearly stable long run margin outlook.
• Future P/E: increased modestly from roughly 12.73x to 12.90x, suggesting a slightly richer valuation multiple on forward earnings.