ViacomCBS (VIAC) shares popped 7.12% after the company delivered strong second-quarter results, attributed to growth in advertising and streaming.
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Total revenue was up 8% year-over-year to $6.56 billion, topping consensus estimates of $6.48 billion. The increase came on the back of a 92% year-over-year increase in global streaming revenue to $983 million. Advertising revenue was also up 24% to $2.1 billion.
It should be noted that adjusted diluted earnings were down 20% year-over-year to $0.97 a share, compared to $1.21 a share reported in the same quarter last year. However, the result beat consensus estimates by a penny. (See ViacomCBS stock charts on TipRanks)
During the quarter, the company added 6.5 million global streaming subscribers to hit over 42 million. It also achieved 82% year-over-year growth in streaming subscription revenue, benefitting from a diverse global content offering.
According to the company’s CEO, Bob Bakish, ViacomCBS achieved a strong business performance in the quarter, characterized by growth in advertising and affiliate segments. Going forward, the growth momentum is expected to continue in the second half of the year.
Bakish stated, “Looking ahead, we’re excited about our opportunity to build on this momentum, as we scale Paramount+’s content offerings across genres and expand our reach with global audiences.”
Yesterday, Needham analyst Laura Martin reiterated a Buy rating on ViacomCBS, as she was impressed by the company’s Q2 results. The analyst has an $80 price target on the stock, implying 92.54% upside potential to current levels.
“We estimate that VIAC’s streaming assets are today worth more than its total market cap today, based on our estimate of VIAC’s 2022E streaming revenues times NFLX’s current valuation of 8.2x EV/2022E revenues,” Martin wrote in a research note to investors.
Consensus among analysts is that VIAC is a Moderate Buy, based on 5 Buys, 3 Holds, and 2 Sells. The average ViacomCBS price target of $49.40 implies an 18.89% upside potential to current levels.
VIAC scores a 5 out of 10 from TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.
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