Sector financial performance:

This company, which primarily markets and manufactures cards and stationary, photo books, personalized gifts, and prints, has been grouped into photographic products sector in photography good and service industry.
It seems that the demand for digital photographic products and service has been weak and continuingly declining in the past several years driven by less customers and orders.
The typical gross margin is about 47%, SG&A is about 26%, and operating margin is about 8% in 2018.
The typical enterprise price/EBI (adjusted with tax shield) ratio is 37.

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Company performance:

It seems that the demand for core products and service of this company has been decreasing gradually since 2016 as indicated by the decrease (8% and 3% for 2018 and 2017) in order numbers while order size increased.
The first three months of fiscal 2018 compared with the same period of 2017 (ended March 31 2018)
Net revenue increased 4%.
Consumer revenue decreased 5% due to decrease of 8% in number of orders offset by increase of 3% in average order price.
Fiscal 2017 compared with fiscal 2016
Net revenue increased 5%.
Consumer revenue was flat due to decrease of 3% in number of orders offset by increase of 3% in average order price.
Fiscal 2016 compared with fiscal 2015
Net revenue increased 7%.
Consumer revenue increased 4% due to increase of 5% in number of orders offset by decrease of 1% in average order price.
Its gross margin (including depreciation, shipping, and rent) was down from 50% to 48% since 2016. And its SG&A as percentage of sales was largely improved to about 26% in 2018 due to decrease in marketing expense and less amortization of some of intangible assets. And this resulted in an improved operating margin of about 8%.

Stock performance

This company is having an enterprise price/cash flow ratio of 37 (excluding amortization of technology). We think that its stock is being relatively Overvalued compared with its weak demand in consumer orders.


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