CSI Update: BUY CaféPress Inc. (NASDAQ–PRSS)

Valuation-$11.27

Price May 19, 2014, 2014-$5.40

PRSS is a little different than our usual picks. Although it is an online business, it basically sells T-Shirts and things. Nevertheless, we have been watching it for a while and think this is a good entry point. I own PRSS.

Latest earnings were for the quarter ended 3/31/2014. Nothing to write home about. Revenues were down from $52.5 million to $48.2 million and they lost $5.2 million versus a $4 million loss last year. Like most “retailers” their business is somewhat seasonal. They are projecting around $250 million of sales for 2014 and breakeven to a loss of $.12 a share on a Non-GAAP basis. Our valuation based on the latest quarter is $11.27 a share. If they hit their guidance, it is over $16 a share.

Back in February, PRSS announced that they had hired Raymond James & Associates to help them pursue “strategic alternatives”. We think PRSS could be sold for a premium to the current stock price, if a buyer can be found.

Trading at only 48% of our valuation we think this is a BUY..

There are about 17 million shares outstanding and it trades about 45,000 shares a day.

About PRSS:

CafePress is The World’s Customization Engine®. Launched in 1999, CafePress empowers individuals, groups, businesses and organizations to create, buy and sell customized and personalized products online using the company’s innovative and proprietary print-on-demand services and e-commerce platform. CafePress’ portfolio of e-commerce websites and services includes CafePress.com, CanvasOnDemand.com, GreatBigCanvas.com, Imagekind.com, InvitationBox.com, Logosportswear.com and EZ Prints, Inc. Additionally, CafePress Services drives revenue for corporate partners by providing turnkey, personalized e-commerce solutions.

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