CuriosityStream Inc

CuriosityStream Inc (NASDAQ: CURI) is an independent factual media company. Its documentary series and features cover every topic from space exploration to adventure to pets' secret life, empowering viewers of all ages to fuel their passions and explore new ones.

Key highlights 

• Acquired Software Acquisition Group Inc: The company closed business combination with Software Acquisition Group, Inc. (NASDAQ: SAQN) and began trading on the NASDAQ exchange under the ticker symbol “CURI” on October 15, 2020, becoming the first streaming media company devoted to factual entertainment to go public.

• Improving operating matrix: In Q3 2020, the company recorded healthy growth in revenue to USD 8.7 million, up from USD 4.8 million in the third quarter of 2019, with total paying subscribers of approximately 13 million, increased by 108% compared to the previous corresponding period. The rising subscriber's number is a key positive. 

• Robust financial guidance: For Q4 2020, the company expects the revenue of at least USD 11.3 million, or 69% year-over-year growth, while for the full year 2020 & 2021, it is expecting the revenue of at least USD 39.5 million, or 119% year-over-year growth and at least USD 71 million, or 80% year-over-year growth, respectively.

• Event update: The company will release its financial results for the fourth quarter of 2020 and for the full fiscal year ended December 31, 2020, on Tuesday, March 23, 2021, after market close. 

Financial overview

Source: Company 

• In Q3 2020, the company posted healthy growth of 83% in revenues to USD 8.74 million, against USD 4.79 million in the previous corresponding period. The revenues increased mainly due to a rise in subscribers.
• The company narrowed its operating loss to USD 6.75 million in the reported quarter, against a loss of USD 10.10 million in the previous corresponding period.
• Net loss in Q3 2020 stood at USD 6.69 million, against a loss of USD 9.66 million in Q3 2019.
• As on September 30, 2020, the company had a cash and investment balance of USD 23.3 million.

Risks associated with investment

The company gets affected by adverse economic conditions, leading to a declining level of subscriptions; this could hurt the demand for their products and services. Other risks include currency fluctuations, technology risks, regulatory risks are also present. 

Valuation Methodology (Illustrative) – EV to Sales 

All forecasted figures and peers have been taken from Thomson Reuters 

Stock recommendation

The company had a strong third quarter, with an 83% year-over-year increase in revenue and growth across all business lines. Its subscribers more than doubled year over year, with notable increases in annual plans and international subscriptions, as it continued to offer fresh and unique original content every week. As per the management, the company continues to be on a three-year trajectory of doubling annual revenue with large recurring revenues and high gross margins as it drives growth across the entire business. They expect a healthy rise in revenues for FY2020 to USD 39.5 million and for FY2021 to USD 71 million. Therefore, based on the above rationale and valuation, we recommend a “Speculative Buy” rating at the closing price of USD 14.72 as on March 08, 2021.

1-Year Price Chart (as on March 08, 2021). Source: Refinitiv (Thomson Reuters)

Second Sight Medical Products, Inc.

Second Sight’s Medical Products, Inc. (NASDAQ: EYES) is a development-stage company which is engaged in developing of neurostimulation technologies used to enhance the lives of blind patients.

Key Updates:

On March 05, 2021, the company reported that U.S. Food and Drug Administration (FDA) had approved the Argus 2s Retinal Prosthesis System, a redesigned set of external hardware (glasses and video processing unit) for the treatment of retinitis pigmentosa (RP). Argus 2s Retinal Prosthesis System provides electrical stimulation, which bypasses the defunct retinal cells and stimulates remaining viable cells inducing visual perception in persons with severe to profound RP.

Q3FY20 Financial Highlights:

• EYES announced its quarterly result, wherein the company posted total operating expenses of USD 1.602 million, significantly lower than USD 7.727 million in the previous corresponding period (pcp).
• The quarter reported a lower research and development expense (USD 0.279 million versus USD 3.379 million in pcp), a decline in general and administrative expense (USD 1.062 million versus USD 2.178 million in pcp).
• Net loss stood lower at USD 1.603 million, as compared to USD 7.584 million in Q3FY19.
• The group reported cash and cash equivalents of USD 2.437 million, while total assets were recorded at USD 3.522 million.

Q3FY20 Income Statement Highlights (Source: Company Report)

Risks: The company is yet to report any revenue from its operations, and the accumulation of net losses would lead to a higher deficit, which is a major concern for the company.

Stock Recommendation:

On March 5, 2021, the group reported the approval of U.S. Food and Drug Administration (FDA) for its Argus 2s Retinal Prosthesis System, and the stock soared significantly post that. During the last one week, the stock rallied ~529% due higher investor’s interest on account of the latest approval. Getting an approval from FDA is a significant milestone for the company; however, the group is yet to generate revenue from its products. The stock has gained significantly in the recent past based on the approval news and there might be further upside based on approval euphoria; but we expect the price to start consolidating at some point. Hence, we prefer to remain on the sideline and recommend an ‘Expensive’ rating on the stock at the closing price of USD 11.77 on March 08, 2021. However, considering the latest developments, investors with a high risk-reward profile may take the position cautiously.

One-Year Price Chart (as on March 8, 2021). Source: Refinitiv (Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.