Goldman Sachs maintains Sell on Cricut despite management’s user-experience-led plan for sustainable growth.

Overview

This conference-takeaways report covers Cricut’s plan to return to sustainable, profitable growth through a stronger user experience, engagement and selective monetization. Goldman Sachs remains Sell-rated, valuing the shares at a blended $4.50 target price.

Core views

Cricut management’s central message was that sustainable, profitable growth should come from improving the customer experience rather than pursuing aggressive monetization. The company is redesigning hardware, simplifying guided workflows and onboarding, adding AI-powered project-creation tools, and making bundles more compelling out of the box. Management believes these initiatives can improve engagement and customer retention over time. Hardware remains the entry point to Cricut’s ecosystem and supports subsequent monetization from subscriptions, accessories and materials. The recently launched Maker 5 is the first major redesign of the flagship Maker platform since 2014. Management said the redesign reduces component count while improving performance at an attractive price point. Cricut is also using Cricut Labs offerings—including patterns, paint-by-number and coloring pages—as targeted monetization tools intended primarily to deepen subscriber engagement. Management pointed to consistent subscription growth and expanding platform revenue, which it said represents roughly 80% of company profitability. It cited year-over-year growth in active users and stabilization in 90-day engaged users as encouraging engagement signals. Selective pricing actions have included premium pricing in the iOS channel and a higher-tier subscription plan with additional AI credits and benefits. However, management has not implemented a broad-based increase to its core $9.99 plan, indicating that stronger engagement would need to persist before such a step. The company is also investing in user acquisition through its “Think It. Make It. Cricut.” campaign and international expansion; Cricut.com traffic is an important indicator of marketing effectiveness and purchase intent. Capital allocation is directed first to hardware innovation, platform development and marketing, especially to grow international awareness and users. Management believes the international opportunity could ultimately rival North America. It remains open to strategic M&A that accelerates existing priorities but does not seek bolt-on acquisitions merely for scale. Excess capital is intended to be returned through repurchases, a recurring semiannual dividend and special dividends when appropriate. Goldman Sachs maintains a Sell rating and a 12-month $4.50 target price, compared with a reported $5.46 price and 17.6% downside. The target uses a blended fundamental/M&A methodology: $4.00 fundamental value, weighted 85%, based on 18x next-twelve-month-plus-one-year P/E; and $6.50 theoretical M&A value, weighted 15%, based on 1.5x NTM+1Y EV/Sales, described as broadly in line with precedent transactions in printing and smart hardware. The firm’s estimates show revenue declining 1.6% to $697.2 million in 2026E before growing 1.3% in both 2027E and 2028E, while EBITDA is forecast to fall from $136.1 million in 2026E to $96.6 million in 2027E.

Analysis framework

Goldman Sachs combines conference commentary on product, engagement, monetization and capital allocation with forecast financial data and a blended valuation. Fundamental value is based on a forward P/E multiple, while a separately weighted theoretical M&A value uses forward EV/Sales and precedent-transaction context.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Fundamental value based on 18x NTM+1Y P/E

  The report applies a forward earnings multiple to estimate a $4.00 fundamental value for Cricut.

• Valuation methodsPS valuation

  Theoretical M&A value based on 1.5x NTM+1Y EV/Sales

  The report uses a forward enterprise-value-to-sales multiple, informed by printing and smart-hardware precedent transactions, to derive a $6.50 theoretical M&A value.

• Industry AnalysisVolume-price decomposition

  Engagement-led growth and selective pricing monetization

  The report distinguishes user engagement and subscriber growth from pricing actions, noting that broad core-plan price increases have not yet been implemented.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Cricut Inc. (CRCT.US)

  Primary covered company; management is pursuing engagement-led ecosystem growth while Goldman Sachs maintains a Sell rating.

  Strengths

  Maker 5 redesign, platform revenue, consistent subscription growth, improving active-user trends, selective premium offerings and international opportunity.

  Weaknesses

  Management has not broadly raised the $9.99 core subscription price, and forecasts show pressure on EBITDA and EPS in 2027E.

  Comparison

  The theoretical M&A value is said to be broadly in line with precedent transactions in the printing and smart-hardware category.

  Risks

  Higher-than-expected connected-machine sales, TAM expansion, engagement levels and long-term operating margins could challenge the Sell case.

Key data

• 12-month target price$4.50Goldman Sachs blended valuation target.
• Current price$5.46Price as of 10 September 2026 close.
• Implied downside17.6%Target price relative to the reported current price.
• Platform contribution to profitabilityRoughly 80%Management stated that platform revenue accounts for roughly 80% of company profitability.
• 2026E revenue$697.2 millionForecast decline of 1.6% from 2025.
• 2027E EBITDA$96.6 millionForecast decline of 34.5% from 2026E.
• Fundamental value$4.0085% valuation weight; based on 18x NTM+1Y P/E.
• Theoretical M&A value$6.5015% valuation weight; based on 1.5x NTM+1Y EV/Sales.

Impact & implications

The report presents engagement, retention and ecosystem improvement as the prerequisite for more durable monetization. While management sees growth opportunities in platform initiatives and international markets, Goldman Sachs’ maintained Sell rating and below-market target price indicate that these initiatives do not alter its negative valuation conclusion.

Risks

• Higher-than-expected connected-machine sales could be favorable for Cricut relative to the Sell thesis.
• An expanding total addressable market could be favorable for Cricut relative to the Sell thesis.
• Stronger engagement levels could be favorable for Cricut relative to the Sell thesis.
• Higher long-term operating margins could be favorable for Cricut relative to the Sell thesis.

What to watch

• Trends in active users and 90-day engaged users.
• Subscription growth and platform-revenue expansion.
• Whether engagement strengthens enough to support a broad increase to the core $9.99 plan.
• Cricut.com traffic as an indicator of marketing effectiveness and purchase intent.
• Progress in international user acquisition and expansion.
• Execution of Maker 5, guided workflows, AI creation tools and bundled offerings.