Media streaming devices appear to be connected and unmanaged devices with primary purpose of receiving on-demand content through Internet and display it on television screen. In midst of significant change and disruption in 2022, global entertainment and media (E&M) industry rechecked strategies, reassessed core operations and made some revisions in key assumptions. Movie studio and news media stocks are in the business of distributing, producing, and exhibiting television shows, movies, live performances, etc. to a diverse set of consumers. It includes wide range of activities including music production & distribution, film production, video game development, etc.
Industry players continue to do so by tapping into several geographical and sectoral growth hotspots and by harnessing evolving technology. In 2023, early predictions have shown that change in media and entertainment business is expected to continue. Studios and video streamers compete with each other for attention, time, and revenues, and for social media, user-generated content along with video games. Movie studio and news media stocks are expected to consider video games, from normal mobile games to multiplayer services along with rich hyper-realistic narrative game worlds.
While streaming video on demand (SVOD) services continues to spend billions on content to tempt and fickle subscribers, social media services are having more free video content than they can take care of. Creators, together with content they produce, should take over social media feeds—as ~7 in 10 US consumers following at least one of such personalities online. While creators directly support social commerce marketplace, they are still creating viral trends, and contributing to time consumers spend when they watch user-generated videos on online platforms. Movie studio and news media stocks are expected to see significant growth as experts believe that valuation of global movies and entertainment market came to the tune of US$90.92 billion in 2021 and should grow from US$97.47 billion in 2022 to US$169.68 billion by 2030. Simply put, this industry should be able to compound at 7.2% between 2023-2030.
With this in mind, let us now look at movie studio and news media stocks with strong growth expectations.
Top 3 Movie Studio and News Media Stocks to buy now
1. Chicken Soup for the Soul Entertainment, Inc.
2. Cineverse Corp.
3. AMC Networks Inc.
1. Chicken Soup for the Soul Entertainment, Inc.
The company is in the business of operating streaming video-on-demand networks. It owns Crackle Plus, that owns and operates variety of ad-supported and subscription-based VOD networks.
It has announced its financial results for 2Q ended June 30, 2023, with net revenue coming at $79.9 million in comparison to net revenue of $37.6 million in the year-ago period. It saw adjusted EBITDA of $0.7 million in comparison to adjusted EBITDA of $5.6 million in year-ago period.
It saw record-breaking performance at kiosks and TVOD as a result of The Super Mario Bros. Crackle Connex decided to sign a deal with TikTok to give content from its platform to more than 3,000 kiosk digital video screens, enabling its brands to leverage Redbox’s digital-out-of-home network.
Equities research analysts at B. Riley announced about lifting their 3Q23 EPS estimates for the company in research report issued to clients and investors dated September 11th. Analyst E. Wold expects that it will earn ($1.21) per share for 3Q23, exhibiting a rise from their previous estimate of ($1.82). B. Riley gave a “Buy” rating on the stock, with price objective of $2.00. Consensus estimate for the company’s current FY earnings came at ($7.99) per share.
2. Cineverse Corp.
The company has been categorised as a leader at the forefront of digital transformation of content distribution. Focus of the company is on providing content, channels, and services to media, technology, and retail companies.
It has released its results for the fiscal 1Q ended June 30, 2023 (1Q24), with total revenues coming at $13.0 million in comparison to $13.6 million. This was mainly because of planned wind-down of lower-margin streaming channels to focus on better performing channels and margins growth.
Digital Distribution services revenue went up by 105.9% to $3.7 million as a result of rise in new release titles and additional library licensing to 3rd party streaming platforms.
Total subscription revenues came in at $3.2 million, exhibiting a rise of 44.7%. Total subscribers to the company’s streaming services came at ~1.21 million, exhibiting a rise of 38%, supported by success of new release and library acquisitions for the company’s flagship enthusiast streaming services and improved performance from documentary streaming service, Docurama.
For FY24, the company expects consolidated revenues of between $62.0 million – $70.0 million and adjusted EBITDA in the range of $2.0 million and $4.0 million.
3. AMC Networks Inc.
The company owns several cable networks, which includes flagship AMC, WE tv, BBC America, IFC, and SundanceTV.
Net revenues of the company in 2Q23 saw a decline of 8% from previous year to $679 million mainly because of lower advertising revenues, domestic affiliate revenues and 25/7 Media production services revenues. This was partly offset by streaming revenue growth which came at 13%.
Operating income of the company saw a decline of 31% from previous year to $106 million, with adjusted operating income falling 10% to $177 million, exhibiting a margin of 26% consistent with previous-year period. Adjusted operating income of the company benefited from cost containment measures, including marketing efficiencies.
Net cash provided by operating activities came at $158 million, with FCF coming at $148 million. This exhibits benefit of acceleration of certain cash payments related to legacy content licensing agreement. Domestic operations revenues fell 6% from prior year to $582 million.
Atria Wealth Solutions Inc. made the acquisition of new stake in shares of AMC Networks Inc. in the first quarter as per most recent Form 13F filing with SEC. State Street Corp increased its stake in the company by 1.5% during 1Q. State Street Corp now owns 1,130,868 shares of $19,881,000 after buying additional 16,984 shares.
Conclusion
Renowned movie studio and news media stocks should be able to outpace market growth rate by the wide margin as these companies should benefit from increased market share, favourable industry dynamics, supportive government measures, increasing disposable income, etc.
Read Also:
5 Comments