Cinedigm Shares Sink 10% On Larger-Than-Feared 3Q Loss

Cinedigm Corp.’s shares dropped 10.5% in Monday’s extended trading session after the streaming content provider announced a larger-than-expected loss in the third quarter, while sales were dented due to the negative impact of its legacy cinema business.

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Cinedigm (CIDM) posted a net loss per share of $0.07 during the third quarter, which was larger than analysts’ expectations of a net loss per share of $0.03.

Revenue fell 13.5% year-on-year to $9.95 million missing analysts’ estimates of $10.57 million. The revenue drop was attributable to a decline in the company’s legacy cinema equipment business, the impact of the pandemic on theatrical sales and the temporary shutdowns of DVD warehousing.

This decrease was partially offset by higher streaming revenue. Cinedigm’s advertising-based channel sales increased 150% year-on-year in 3Q.

Cinedigm’s Chief Strategy Officer Erik Opeka said, “As demonstrated by the fantastic organic growth results we have achieved this year, our platform and technology give Cinedigm a clear competitive advantage in launching, operating and scaling streaming services profitable and efficiently.” (See Cinedigm stock analysis on TipRanks)

Last month Benchmark Co. analyst Daniel Kumos reiterated a Buy rating on the stock with a price target of $3.50 (83% upside potential). Kumos noted, “Cinedigm has put themselves squarely on the map as a growing player of scale.”

The rest of the Street has a Moderate Buy consensus rating on the stock based on 2 Buys. The average analyst price target of $3.25 implies about 70.2% upside from current levels. That’s after the stock exploded 267% over the past year.