Cantaloupe, Inc. (CTLP): A Bull Case Theory

We came across a bullish thesis on Cantaloupe, Inc. (CTLP) on P14 Capital’s Substack. In this article, we will summarize the bulls’ thesis on CTLP. Cantaloupe, Inc. (CTLP)'s share was trading at $8.58 as of 27^th May. CTLP’s trailing and forward P/E were 10.72 and 18.25 respectively according to Yahoo Finance.

Cantaloupe Inc. (CTLP) reported mixed results for its fiscal third quarter of 2025, with revenue increasing 11.1% year-over-year to $75.4 million, slightly missing consensus estimates by $4.4 million. The quarter’s revenue growth was impacted by weather-related disruptions in the Northeast and Midwest, which softened transaction volumes. While both transaction and subscription fees grew approximately 10% year-over-year, this represented a slowdown from previous quarters.

However, the company delivered strong operational efficiency, with gross margin expanding by 120 basis points year-over-year to 39.5% and adjusted EBITDA increasing 36.6% to $13.9 million, representing a 21.35% margin. GAAP EPS came in at $0.65 due to a $42.2 million tax benefit, while adjusted EPS was $0.09, up 52% year-over-year. Cantaloupe's Smart Store product line showed strong momentum with over $2 million in sales, and demand is expected to accelerate in the fiscal fourth quarter.

The company also highlighted strategic wins, including an exclusive point-of-sale deal with Carnival Cruise Line through Cheq, and new deployments at sports and entertainment venues such as PayPal Park and SAP Center. It launched the Engage Pulse reader tailored for amusement venues, further diversifying its customer base. While international growth remains a future opportunity, it currently contributes minimally to revenue. Management lowered full-year revenue guidance to $302–$308 million from a prior range of $308–$322 million, though EBITDA guidance of $46–$50 million was reaffirmed. Analysts maintain a constructive long-term view, with a 2026 price target of $14.40, representing approximately 87% upside from current levels.

Previously, we have covered Cantaloupe, Inc. (CTPL) before their earnings update, wherein we summarized a bullish thesis by the same author. The author highlighted the company’s strong fundamentals, margin expansion, and growth in cashless payments. The article also noted potential upside from a strategic review, including a possible sale or go-private deal. Since our last coverage, the stock is up 8.88% as of 28^th May.

Cantaloupe, Inc. (CTLP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held CTLP at the end of the first quarter which was 19 in the previous quarter. While we acknowledge the risk and potential of CTLP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CTLP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.