2024-03-20 09:00:00 ET
Summary
- Paramount stock has been upgraded as a speculative Buy, with the management guiding improved DTC monetization as its licensing revenues grows, well balancing the secular decline of TV Media.
- Paramount+ also reports growing DTC subscription base and ARPUs on a QoQ/YoY basis, highlighting its improving existing user retention and new user acquisition.
- The cut dividends also allow the management to temporarily deleverage its balance sheet, with raised payouts likely, once the media company's profitability improves through 2025.
- Readers must also note that the PARA stock is still massively discounted from its Book Value per share of $34.50 (-2.6% YoY), attributed to its robust IPs and assets.
- However, for so long there is no clarity surrounding PARA's merger/ takeover, the stock may remain volatile, worsened by the elevated short interest of 14.69%.
We previously covered Paramount Global ( PARA ) in December 2023, discussing the rumors surrounding its supposed merger with Warner Bros. Discovery ( WBD ) and/or asset sale to Skydance, with things seemingly hanging in delicate balance.
With more uncertainties ahead, it remained to be seen if the stock was able to hold on to its gains, with us preferring to continue rating the stock as a hold (Neutral) then....
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Paramount: Bullish Support At 15-Year Floor Observed, But Volatility Remains (Rating Upgrade)