CuriosityStream Inc.

CURI Details

CuriosityStream Inc. (NASDAQ: CURI) is a media and entertainment firm that provides premium video content in the categories of science, history, lifestyle, and technology. Its nonfiction content collection includes over 3,600 nonfiction programs, including over 1,000 original, commissioned, or co-produced documentaries worth an estimated USD 1 billion in original production value.

Latest News:

• Investment in Nebula: On September 02, 2021, CURI announced extended strategic cooperation and investment in Nebula, the world's largest creator-owned streaming and technology platform. As part of this transaction, which is estimated to be worth over USD 50 million, CURI will receive a significant minority stake and board membership in Nebula.

9MFY21 Results:

• Surge in Topline: CURI reported an increase of 55.64% in revenues to USD 43.99 million during 9MFY21 (ended September 30, 2021) compared to USD 28.26 million during 9MFY20, due to an increase in subscription and license fee revenues.
• Rise in Losses: It witnessed an increase in net losses to USD 26.23 million during 9MFY21 vs. USD 22.80 million during 9MFY20.
• Increase in Total Paying Subscribers: CURI's total paying subscribers for the period grew 43% YoY to 20 million.
• Healthy Balance Sheet: As of September 30, 2021, the company's cash and cash equivalents (including short-term investments) stood at USD 80.84 million and had no outstanding debt.

Key Risks:

• Customer Concentration Risk: During FY20 and FY19, CURI's top three clients accounted for 41% and 35% of total sales, respectively. Such over-reliance on a few individual clients for revenue may be detrimental to its financial health.
• Payment Processing Risk: CURI entrusts payment processing to third parties. Should these third parties refuse or are unable to continue processing payments on CURI's behalf, it may be forced to find alternate means of collecting payments, which may harm its customer acquisition and retention and, ultimately, its financial situation.

Outlook:

• FY21 Estimates: As of November 09, 2021, the firm expects its FY21 revenues to be about USD 71 million, representing an 80% increase YoY.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CURI Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

CURI's share price has fallen 64.67% in the past nine months and made a fresh 52 week low today. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 26.77, indicating an oversold zone. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 10.01.

Considering the company's growth prospects, various initiatives to monetize digital content, decent fundamentals, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 8.09, down 3.11%, as of November 19, 2021, at 1:24 PM ET.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.  

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