The rapid technological progress and increasing deployment of 5G should bode well for the entertainment industry. However, we think it’s wise to avoid Warner Bros. (WBD), Chicken Soup for the Soul (CSSE) and Genius Brands (GNUS) with weaker fundamentals. On the contrary, News Corporation (NWSA), with its impressive financial prospects, could be an ideal investment. Continue reading….
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The media and entertainment industry has undergone rapid change due to technological advances and evolving consumer preferences. During the Covid-19 pandemic, people demanded more media and entertainment at home, helping online entertainment companies thrive.
While the pandemic has permanently altered consumer tastes, outdoor entertainment companies have rebounded significantly as restrictions eased due to the pandemic.
Additionally, the growing 5G deployment will enable industry participants to strengthen their presence in the market. Combined with the development of artificial intelligence and virtual reality, new network standards could revolutionize the entertainment industry.
The entertainment market is estimated to reach $642.5 billion by 2029. CAGR 20.5% However, not all stocks are in a position to take full advantage of the industry’s tailwinds.
It may be wise to avoid entertainment stocks.WBDMore), Chicken Soup from Seoul Entertainment Co., Ltd. (CSSE), Genius Brands International, Inc. (Genus), given the weak fundamentals. On the contrary, News Corporation (NWSA) has impressive growth prospects, so make sure you buy now.
Strains to avoid:
Warner Bros. Discovery (WBDMore)
A media company, WBD produces and develops feature film, television, games and other content in a variety of physical and digital formats through basic network, consumer or theatrical, television content and game licensing. , and distribute. We provide content to various distribution platforms in approximately 50 languages around the world.
In the second quarter ending June 30, 2022, WBD’s total costs and expenses increased 490% year-over-year to $13.47 billion.this is operating loss Operating income was $3.64 billion compared to $720 million and net loss was $3.41 billion compared to net income of $718 million. The company had a loss per share of $1.50 and EPS of $1.01.
The consensus EPS forecast of $0.17 represents a year-over-year decline of 38.2% for the third quarter ending September 2022.
WBD’s POWR rating Consistent with this bleak outlook. A stock’s overall F rating translates to a strong sell in its own rating system. The POWR Rating is calculated by considering 118 different factors, with each factor being optimally weighted.
WBD is rated D grade for quality, growth and sentiment. Within specified range Entertainment – Media Producer Ranked lowest among 18 brands in the industry.
To see additional POWR ratings for WBD Value, Stability and Momentum: click here.
Seoul Entertainment Co., Ltd. Chicken Soup (CSSE)
CSSE is a streaming video on demand (VOD) company with US and international operations. It owns and operates various ad-supported and subscription-based VOD networks, including Crackle, Chicken Soup for the Soul, Popcornflix, Popcornflix Kids, Truli, Pivotshare, Españolflix, and FrightPix.
For the second quarter ending June 30, 2022, CSSE’s operating loss increased 115% year-over-year to $16.78 million. Net loss increased 108.4% year-over-year to $18.39 million and loss per share increased 76% year-over-year to $1.39.
EPS is expected to remain negative in the third quarter ending September 2022. The company’s stock has plunged 48.5% over the past year.
The poor outlook for CSSE is also evident in the POWR rating. The stock receives an overall F rating, which equates to a strong sell on the POWR rating system. D grades for sentiment, stability, and value. CSSE is ranked 17th in the entertainment-media producer industry.
click here To see additional POWR ratings for CSSE (Momentum, Quality, and Growth).
Genius Brands International (Genus)
GNUS, a content and brand management company, creates and licenses multimedia content for toddlers and teenagers around the world. The company offers Rainbow Rangers, an anime series about the adventures of seven magical girls. Rama Rama from the anime series. SpacePop, music and fashion driven animated property. and other related multimedia.
GNUS total operating expenses increased 210% year-over-year to $30.73 million in the second quarter ending June 30, 2022. Operating loss increased 13.6% year-over-year to $8.6 million. The year-ago quarter was $13.43 million. The company’s loss per share increased 100% year-over-year to $0.04.
The stock has fallen 48.2% over the past year.
GNUS’ weak fundamentals are reflected in its POWR rating. The stock has an overall rating of F, which equates to a strong sell on our proprietary rating system. This strain has an F grade for value and a D grade for stability and quality. Ranked 16th in the industry.
In addition to the highlighted POWR ratings, you can see GNUS ratings for Growth, Value, Sentiment, and Momentum. here.
Stock to buy:
News Corporation (NWSA)
A media and information services company, NWSA creates and distributes trusted and engaging content and other products and services for consumers and businesses worldwide. His six business segments are Digital Real Estate Services, Subscription Video Services, Dow Jones, Book Publishing, News Media, and Others.
In June, NWSA announced the completion of its acquisition of the Base Chemicals business from S&P Global Market Intelligence. The business will operate under the name Chemical Market Analytics by his OPIS under the Dow Jones umbrella. NWSA acquired OPIS (Oil Price Information Service) and related assets from S&P Global and IHS Markit in February.
For the fourth quarter ended June 31, 2022, NWSA’s net revenues were $2.67 billion, up 7.3% year-over-year. Its net profit reached $110 million, compared to his net loss of $14 million in the previous period. His EPS for the company came to $0.19 compared to a net loss of $0.02 in the previous quarter.
The consensus EPS forecast for the third quarter ending March 2023 is $0.18, representing 14.6% year-over-year growth. Analysts expect revenue to grow 2% year over year to $2.55 billion in the first quarter through September 2022.
NWSA’s strong fundamentals are reflected in its POWR rating. The stock has an overall rating of B, which corresponds to a buy in our rating system. This strain also has a B grade for Sentiment. No. 1 in the industry.
In total, we assess the NWSA at eight different levels. In addition to the above, we also give NWSA ratings for value, growth, momentum, quality and stability.Get All NWSA Ratings here.
WBD shares rose $0.14 (+1.10%) in premarket trading on Tuesday. Year-to-date, the WBD is down -49.57%, compared to a -12.40% rise in the S&P 500 Index over the same period.
About the author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to enable investors to assess company fundamentals before investing.
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