Hope springs eternal in the human breast. And if you needed proof, just look to entertainment giant Paramount (PARA), who still expects the Skydance merger to be complete before the leaves start turning colors in North America. While there is certainly a lot to say that will not happen, Paramount still believes. Investors are cautiously optimistic too, as shares notched up fractionally in the closing minutes of Thursday’s trading.
While there are still plenty of issues surrounding the deal—pushback from the Federal Communications Commission, from the President of the United States who happens to be suing Paramount, and its own shareholders—Paramount holds out hope that the deal can still conclude as planned.
The fact that Paramount has been actively moving to clear those hurdles, including a planned mediation deal with President Trump to settle the lawsuit, makes it clear it wants that deal to happen. It recently adjusted its diversity, equity and inclusion (DEI) practices to better conform to current government policy. Whether it can resolve all these points to the satisfaction of everyone with a grudge remains to be seen.
Earnings Report Delivers Mixed Results
We mentioned yesterday that Paramount’s earnings would be closely scrutinized, and indeed, they brought out a lot to scrutinize. For instance, its efforts in streaming—which many consider the future of television—fell short of expectations, coming in with a $286 million loss. That is, however, a clear improvement over 2023’s fourth quarter, when Paramount posted a loss of $490 million.
And, Paramount+ managed to pick up an extra 5.6 million subscribers, the best rise it has seen in two years. That, coupled with full-year streaming revenue that was 8% better in 2024 than 2023, suggests that Paramount+ might be finding its feet. But with linear television in a continued decline, and even large-scale theatrical releases posting an adjusted operating loss of $42 million, the losses may have outweighed the gains.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on two Buys, four Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 3.13% rally in its share price over the past year, the average PARA price target of $12.75 per share implies 13.13% upside potential.
