Cadre Holdings (CDRE) Margin Decline Undercuts Bullish Narratives Despite Strong Earnings Track Record

Cadre Holdings (CDRE) has posted average annual earnings growth of 14.3% over the past five years, but its latest net profit margin slipped to 6.7% from 7.5% the previous year. Looking ahead, revenue is expected to grow at 8% per year and earnings at just under 14% annualized, both trailing the broader US market forecasts. Investors are likely to focus on the company’s history of high-quality earnings, especially as the current DCF analysis points to undervaluation. However, concerns remain about premium pricing and lagging growth expectations.

See our full analysis for Cadre Holdings.

Now, let’s see how the latest earnings results stack up when we weigh them against the most widely discussed narratives for Cadre Holdings. Which themes are confirmed, and which might need a rethink?

See what the community is saying about Cadre Holdings

Margin Expansion Forecasted to Outpace Revenue Gains

• Analysts expect profit margins to climb from 6.7% today to 9.5% within three years, a sharper improvement than top-line growth forecasts for the same period.
• Analysts' consensus view emphasizes that:
  • Synergies from recent international acquisitions and margin expansion in high-growth safety sectors are seen as key catalysts for improved profitability, supporting the outlook for rising margins even if annual revenue growth (11.2% forecast) trails the broader US market.
  • What stands out is the expectation that integration of newly acquired nuclear safety operations will drive both scale and operating leverage, leading to better margins and earnings per share growth over time.

Consensus opinion sees Cadre’s ability to push its margin expansion ahead of revenue growth as a main lever for value. Read the full consensus narrative for more on how analysts balance optimism and risk in their price targets. 📊 Read the full Cadre Holdings Consensus Narrative.

Valuation Signals Discount Despite High P/E

• The discounted cash flow (DCF) fair value for Cadre Holdings is $55.86, significantly above the current share price of $45.11, while the company’s 48.1x P/E remains elevated compared to US Aerospace & Defense peers (34.4x).
• Analysts' consensus view argues that:
  • DCF-based undervaluation provides a buffer in the eyes of investors who focus on long-term cash generation, even though premium multiples indicate the market demands consistent growth to justify such a high P/E.
  • This creates an unusual tension because Cadre trades at a high earnings multiple but below both the consensus price target ($44.67) and DCF fair value. The direction depends on whether the company delivers the anticipated margin and earnings expansion.

Heavy Government Reliance Adds Volatility Risk

• Revenue predictability depends strongly on budget cycles in law enforcement, military, border security, and nuclear sectors. Delayed government contracts and funding changes could cause earnings to underperform guidance.
• Analysts' consensus view points out that:
  • Exposure to shifting procurement cycles and integration risks from recent acquisitions means rapid expansion does not automatically lead to stable margin or EPS gains, especially if order timing continues to be unpredictable.
  • Consensus narrative cautions that global instability and supply chain disruption, while supporting demand in the near term, may amplify volatility and pressure margins if not managed carefully as Cadre scales internationally.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Cadre Holdings on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Viewing the numbers from another angle? In just a few minutes, you can shape your own perspective and add to the story: Do it your way.

A great starting point for your Cadre Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Cadre Holdings faces uncertainty from its dependence on government contracts and unpredictable order timing. This makes its earnings and growth outlook less stable than peers.

If you’d prefer companies with steadier performance through economic shifts, uncover options with consistent results using our stable growth stocks screener (2074 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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