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CuriosityStream: Let It Ride With This Top-Performing Streaming Stock
CURICuriosity(CURI) Seeking Alpha·2024-09-16 17:14

Core Viewpoint - CuriosityStream (CURI) stock has experienced significant price fluctuations, transitioning from a low of 0.45inearly2024torecentgains,raisingquestionsaboutfutureupsidepotentialdespiteashiftawayfrom"deepvalue"status[1][2].Group1:CompanyHistoryandPerformance−CuriosityStreamhasundergonethreedistinctstagessinceitsSPACdebut:the"deSPACing"phase,the"whacked"phasefollowingtheSPACbubbleburst,andthecurrent"comeback"phasedrivenbypositiveQ42023earningssurprisesandanewcashdividendprogram[2][3].−Thecompanyreporteda12.10.45 in early 2024 to recent gains, raising questions about future upside potential despite a shift away from "deep value" status [1][2]. Group 1: Company History and Performance - CuriosityStream has undergone three distinct stages since its SPAC debut: the "deSPACing" phase, the "whacked" phase following the SPAC bubble burst, and the current "comeback" phase driven by positive Q4 2023 earnings surprises and a new cash dividend program [2][3]. - The company reported a 12.1% decline in revenue year-over-year for Q2 2024, primarily due to a strategic pivot from licensing content to focusing on its subscription-based streaming platform [3][4]. - Despite the revenue drop, gross profits increased by 52% year-over-year, and net losses narrowed significantly from 9.6 million in Q2 2023 to 2millioninQ22024[4].Group2:FinancialMetricsandValuation−CuriosityStream′smarketcapstandsat2 million in Q2 2024 [4]. Group 2: Financial Metrics and Valuation - CuriosityStream's market cap stands at 105.4 million, with an enterprise value of approximately 70.4millionafteraccountingforcashanddebt[6].−Thecompany’strailingtwelve−monthEBITDAisaround70.4 million after accounting for cash and debt [6]. - The company’s trailing twelve-month EBITDA is around 5 million, suggesting a potential EV/EBITDA ratio of about 7x, compared to a median of 10.5x for its sector [6]. - Valuation estimates indicate that the operating business could be worth around 105million,leadingtoapotentialsharepriceofapproximately105 million, leading to a potential share price of approximately 2.64, representing an upside of about 36.8% from recent performance [6]. Group 3: Strategic Initiatives and Future Growth - CuriosityStream's strategic pivot towards factual programming and partnerships, such as with Estrella for Spanish-language content, may enhance revenue growth and improve market perception [7][8]. - The company has room to increase its dividend, which currently represents an annual outflow of around $5.6 million, potentially leading to further share price growth [9]. - There is potential for CuriosityStream to pursue strategic alternatives, including acquisitions, which could enhance its valuation and market position [11]. Group 4: Market Conditions and Investor Sentiment - The recent stock price increase has been influenced by expectations of interest rate cuts, which may lead to volatility in the short term as high-yield stocks are affected by market dynamics [5][12]. - While the stock has seen significant gains, there are concerns about future performance and the sustainability of its streaming platform amid aggressive cost-cutting measures [12].