Shares of the Cricut creative platform are at a three-year high. How did it surprise investors?

Shares of Cricut, whose software allows users to create creative projects and whose specialized machines enable them to print greeting cards, engrave metal, and emboss leather, soared nearly 50% on November 4, reaching their highest level since October 2023. Wall Street had expected “lackluster quarterly results from the company, but got brilliant ones,” explains Motley Fool contributing analyst Anders Bilund.

Cricut shares surged 49% on the Nasdaq on November 4, reaching $8.88. This is the highest level since October 2023.

The rally was triggered by the company’s third-quarter financial results. According to the report, Cricut’s revenue increased 11% year-over-year during the reporting period to $188.6 million, while earnings per share (EPS) rose 30% to $0.13.

Both figures exceeded Wall Street's forecasts, notes Motley Fool contributing analyst Anders Bilund. The consensus estimate was for revenue of $164.4 million and EPS of $0.05.

The company's revenue from paid subscriptions increased by nearly 4% year-over-year, to $85.9 million, while revenue from product sales rose by 17% to $102.7 million. Users can purchase access to Cricut software and create their own projects there—such as stickers, T-shirt designs, custom keychains, or engravings. They can then use special equipment to produce the finished product.

Cricut management expects revenue to grow in 2026 for the first time since 2021, according to another Motley Fool article covering the results of the company’s earnings call with analysts.

The publication believes that long-term investors should take a number of factors into account.

First, this expansion of the line of electronic cutting machines is intended to attract new customers and increase engagement. The company launched the new product only at the end of the quarter, and although it has already contributed to the growth of its financial metrics, the main impact is yet to come, the article states.

Second, sales in international markets are having a growing impact on Cricut's financial performance: in the past quarter, they grew by 30% and accounted for 28% of the company's revenue.

The Motley Fool also notes that third-quarter gross profit growth was driven by one-time factors, including tariff rebates under the International Emergency Economic Powers Act (IEEPA).

Cricut has $272.7 million in cash and no debt, which has allowed it to announce a special dividend of $0.7 in addition to its semi-annual dividend of $0.1, as well as increase its share buyback limit to $50 million, the article states.

Even after the rally on November 4, Cricut shares remain affordable for investors, trading at a price 19.2 times last year's earnings, writes Anders Bilund.

“Not bad for a company that Wall Street had all but written off as a passing fad during the 2021 pandemic,” he notes.

Cricut stock has three analyst ratings —all “sell”—with an average price target of $4.7, which is 47% below the stock’s last closing price.