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1. Company Snapshot

1.a. Company Description

CompoSecure, Inc.manufactures and designs metal, plastic, composite ID, and proprietary financial transaction cards in the United States and internationally.Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products.


The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which comprise the Arculus Key card Cold Storage hardware device and companion Arculus Wallet mobile App to keep the Private Key in the Arculus Key card highly secure and store cryptocurrency and digital assets.It serves financial institutions, plastic card manufacturers, government agencies, system integrators, and security specialists.The company was founded in 1910 and is based in Somerset, New Jersey.

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1.b. Last Insights on CMPO

The recent 3-month performance of CompoSecure, Inc. was negatively impacted by a shareholder alert investigation, which may have contributed to the company's decline. The investigation, led by Kaskela Law LLC, aimed to determine whether CompoSecure and its officers breached their fiduciary duties to shareholders. Additionally, a price target cut by Needham analyst John Todaro, from $16 to $15, following the company's Q4 2024 earnings release, may have also weighed on the stock. Furthermore, the spin-off of Resolute Holdings, which was completed on February 28, 2025, may have caused some uncertainty among investors.

1.c. Company Highlights

2. CompoSecure's Q3 2025 Earnings: Strong Growth and Strategic Acquisition

CompoSecure reported a robust third quarter, with net sales increasing 13% year-over-year to $120.9 million, driven by disciplined execution and operational focus. Pro forma adjusted EBITDA rose 30% to $47.7 million, with an EBITDA margin of 39.5%. The company's gross margin expanded to 59% from 51.7% in the same quarter last year, reflecting the successful implementation of the CompoSecure Operating System. Earnings per share (EPS) came in at $0.29, beating estimates of $0.23. The strong financial performance has led to an upward revision of the 2025 outlook, with expected non-GAAP net sales of approximately $463 million and pro forma adjusted EBITDA of $165 million to $170 million.

Publication Date: Nov -16

📋 Highlights
  • Q3 Net Sales Growth:: Net sales rose 13% year-over-year to $120.9 million, driven by strategic initiatives and operational execution.
  • Pro Forma Adjusted EBITDA:: Increased 30% to $47.7 million with a 39.5% EBITDA margin, reflecting improved gross margins (59% vs. 51.7% prior year).
  • 2025 Financial Guidance:: Projects $463 million in non-GAAP net sales and $165–$170 million in pro forma adjusted EBITDA, with 2026 guidance at $510 million sales and $190 million EBITDA.
  • Husky Acquisition Terms:: $5 billion acquisition (11.2x 2026 EBITDA) to create a $7.4 billion combined enterprise (11.6x EBITDA), funded via $2 billion private placement, $1 billion equity roll, and $2 billion debt.
  • Combined Platform Metrics:: Targets 7.5% free cash flow yield in Year 1, 100 bps annual margin expansion, and 70% recurring revenue post-merger, with $13,500 installed systems driving 65% recurring revenue from Husky’s model.

Guidance and Outlook

The company has also introduced guidance for 2026, expecting non-GAAP net sales of around $510 million and non-GAAP pro forma adjusted EBITDA of approximately $190 million, implying a revenue growth rate of about 10% year-over-year, which is slightly higher than the analyst estimates of 8.1%. This indicates a positive outlook for the company's continued growth trajectory.

Strategic Acquisition of Husky

The acquisition of Husky for approximately $5 billion or 11.2x 2026 net adjusted EBITDA will create a best-in-class diversified compounder. The combined platform is expected to deliver mid- to high single-digit organic growth, approximately 70% recurring revenue, and 12.5% EBITDA growth annually. The transaction is highly accretive to CompoSecure's investors and supports long-term value creation, as highlighted by Dave Cote, "The combination of CompoSecure and Husky as the foundation for a best-in-class diversified compounder."

Valuation and Metrics

With a P/E Ratio of -10.39 and an EV/EBITDA of -23.31, the current valuation metrics indicate a complex picture. However, considering the expected growth and the strategic acquisition, these metrics might be justified. The company's ROE stands at 469.31%, and ROIC at 1.57%, indicating a strong return on equity. The Net Debt / EBITDA ratio is 1.52, suggesting a manageable debt level. The Free Cash Flow Yield is 1.15%, which, while not exceptionally high, is positive.

3. NewsRoom

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Contrasting Evertec (NYSE:EVTC) & CompoSecure (NASDAQ:CMPO)

Dec -07

Source: defenseworld.net

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All You Need to Know About CompoSecure (CMPO) Rating Upgrade to Buy

Nov -24

Source: zacks.com

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Are Business Services Stocks Lagging CompoSecure (CMPO) This Year?

Nov -24

Source: zacks.com

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CompoSecure (NASDAQ:CMPO) Trading Up 6.9% on Analyst Upgrade

Nov -05

Source: defenseworld.net

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CompoSecure (NASDAQ:CMPO) & Sezzle (NASDAQ:SEZL) Financial Contrast

Nov -04

Source: defenseworld.net

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CompoSecure, Inc. (CMPO) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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CompoSecure Reports Strong 3Q25 Financial Results and Announces Business Combination with Husky Technologies

Nov -03

Source: globenewswire.com

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Resolute Holdings Reports Third Quarter 2025 Results

Nov -03

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.20%)

6. Segments

Metal, Composite and Proprietary Financial Transaction Cards

Expected Growth: 10.2%

Growing demand for premium and durable financial transaction cards, increasing adoption of contactless payments, and rising need for customized cards drive CompoSecure's growth. The company's innovative metal, composite, and proprietary cards cater to this demand, positioning it for significant growth in the financial services industry.

7. Detailed Products

Arcula

A premium payment card product that offers advanced security features and design flexibility

Expedite

A rapid card production and fulfillment service that enables fast and secure delivery of payment cards

Card@Once

An instant issuance solution that allows financial institutions to issue fully functional payment cards on the spot

Dual Interface

A payment card product that combines the benefits of contactless and contact payment technologies

Metal Cards

Premium metal payment cards that offer a unique and luxurious payment experience

Digital Onboarding

A digital onboarding platform that enables customers to remotely apply for and receive payment cards

8. CompoSecure, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

CompoSecure, Inc. operates in a niche market with limited substitutes, reducing the threat of substitutes.

Bargaining Power Of Customers

CompoSecure, Inc. has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

CompoSecure, Inc. relies on a few key suppliers, giving them some bargaining power.

Threat Of New Entrants

The financial services industry is highly competitive, and new entrants can easily disrupt the market.

Intensity Of Rivalry

CompoSecure, Inc. operates in a highly competitive market with many established players, leading to intense rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight -73.48%
Debt Cost 7.26%
Equity Weight 173.48%
Equity Cost 7.60%
WACC 7.84%
Leverage -42.36%

11. Quality Control: CompoSecure, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Insteel Industries

A-Score: 6.5/10

Value: 5.3

Growth: 4.3

Quality: 6.2

Yield: 9.0

Momentum: 8.5

Volatility: 5.3

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Northwest Pipe

A-Score: 5.2/10

Value: 6.2

Growth: 6.6

Quality: 5.1

Yield: 0.0

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Volatility: 6.3

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Proto Labs

A-Score: 4.7/10

Value: 3.2

Growth: 3.9

Quality: 6.5

Yield: 0.0

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Volatility: 5.3

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CompoSecure

A-Score: 4.5/10

Value: 6.5

Growth: 0.9

Quality: 5.6

Yield: 1.0

Momentum: 9.0

Volatility: 4.0

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Mayville Engineering Company

A-Score: 4.2/10

Value: 7.1

Growth: 7.4

Quality: 5.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

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Tredegar

A-Score: 3.8/10

Value: 5.5

Growth: 1.0

Quality: 2.4

Yield: 2.0

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

20.38$

Current Price

20.39$

Potential

-0.00%

Expected Cash-Flows