Cineverse (CNVS) AI Stock Analysis

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Cineverse

(NASDAQ:CNVS)

62Neutral

Cineverse's overall score is supported by a very positive earnings call, which highlighted significant revenue growth and strong financial health. However, mixed financial performance due to persistent profitability challenges and a negative P/E ratio weigh on the score. The technical indicators and valuation metrics also present a neutral to cautious outlook.

Positive Factors

Earnings

Cineverse beat the revised revenue estimate by almost $2 million, with all of that upside flowing through to EBITDA.

Future Projects

The company's roadmap includes 3-4 films planned for distribution with better economics in the near-term, ramping to 8-10 films per year over the medium-term.

Revenue Streams

The promise of a risk-free, smaller indie film-based advertising revenue stream is seen as a unique opportunity for Cineverse.

Negative Factors

Merchandising and Sales

Expectations are tempered by a combination of timing and lack of clarity around success in merchandising and physical sales contributions.

Cineverse (CNVS) vs. S&P 500 (SPY)

Market Cap

$44.74M

Dividend YieldN/A

Average Volume (3M)96.49K

Price to Earnings (P/E)―

Beta (1Y)1.38

Revenue Growth39.86%

EPS Growth3.86%

CountryUS

Employees176

SectorCommunication Services

Sector Strength98

IndustryEntertainment

Share Statistics

EPS (TTM)-0.99

Shares Outstanding15,979,558

10 Day Avg. Volume90,419

30 Day Avg. Volume96,487

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.78

Price to Cash Flow (P/CF)1.90

P/FCF Ratio1.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.50

Price Target Upside203.57% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Cineverse Business Overview & Revenue Model

Company DescriptionCineverse (CNVS) is a dynamic entertainment company that operates within the digital media and entertainment industries. The company focuses on providing a wide array of content through streaming services, offering a diverse library that includes movies, television shows, and original programming. Cineverse aims to deliver engaging and high-quality entertainment experiences to a global audience, leveraging digital platforms to reach viewers across various devices and preferences.

How the Company Makes MoneyCineverse generates revenue primarily through subscription fees from its streaming service. By offering a tiered subscription model, the company appeals to different consumer segments, from casual viewers to avid entertainment enthusiasts. Additionally, Cineverse capitalizes on advertising revenue through ad-supported streaming options. The company also engages in licensing agreements, distributing its original and acquired content to other platforms and networks. Furthermore, Cineverse explores strategic partnerships with content creators and technology providers to enhance its offerings and expand its market reach. These diverse revenue streams enable Cineverse to maintain a competitive position within the rapidly evolving digital entertainment landscape.

Cineverse Financial Statement Overview

Summary

Cineverse shows a mixed financial health profile with notable revenue growth and improved cash flow management. However, persistent net losses and negative profitability metrics highlight challenges. The balance sheet has improved leverage, yet the negative return on equity indicates ongoing profitability issues.

Income Statement

Neutral

Cineverse displays significant volatility in its income statement metrics. The TTM gross profit margin is robust at 50.85%, yet the net profit margin is negative due to consistent net losses indicating profitability challenges. Revenue growth from the previous year is notable at 47.5%, but historical volatility raises concerns about sustainable growth. The negative EBITDA margin highlights operational inefficiencies.

Balance Sheet

Neutral

The company's debt-to-equity ratio has improved to 0.12 in the TTM, reflecting reduced leverage risk. However, the equity ratio stands at 46.46%, suggesting moderate financial stability. Return on equity is negative, indicating profitability issues impacting shareholder returns.

Cash Flow

Neutral

Cineverse shows positive free cash flow in the TTM, with a significant turnaround from previous negative figures, signaling improved cash management. The operating cash flow to net income ratio is positive, indicating efficient cash generation relative to reported losses.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
72.47M	49.13M	68.03M	56.05M	31.42M	39.29M
	Gross Profit
36.85M	30.00M	27.90M	30.59M	8.40M	12.75M
	EBIT
7.19M	-15.70M	-8.17M	1.08M	-13.47M	-4.35M
	EBITDA
-4.59M	-16.42M	-4.46M	6.41M	-52.21M	2.24M
	Net Income Common Stockholders
-11.97M	-21.41M	-9.73M	2.21M	-62.82M	-14.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.08M	5.17M	7.15M	13.06M	16.85M	14.29M
	Total Assets
80.54M	64.38M	88.08M	104.64M	75.45M	110.44M
	Total Debt
4.38M	7.16M	6.21M	749.00K	11.99M	49.97M
	Net Debt
-1.71M	2.00M	-947.00K	-12.31M	-4.86M	35.67M
	Total Liabilities
44.08M	32.23M	49.01M	63.69M	59.56M	129.73M
	Stockholders Equity
37.43M	33.27M	40.34M	42.25M	17.24M	-18.01M
Cash Flow		Free Cash Flow
1.95M	-11.66M	-10.24M	4.24M	-22.62M	6.51M
	Operating Cash Flow
3.49M	-10.59M	-8.97M	4.88M	-20.01M	7.76M
	Investing Cash Flow
-704.00K	-531.00K	-1.27M	-12.30M	-1.71M	-1.25M
	Financing Cash Flow
-2.24M	9.14M	4.33M	2.64M	24.27M	-10.09M

Cineverse Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.80

Price Trends

50DMA

3.66

Negative

100DMA

3.64

Negative

200DMA

2.42

Positive

Market Momentum

MACD

-0.16

Positive

RSI

35.44

Neutral

STOCH

13.48

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNVS, the sentiment is Negative. The current price of 2.8 is below the 20-day moving average (MA) of 3.23, below the 50-day MA of 3.66, and above the 200-day MA of 2.42, indicating a neutral trend. The MACD of -0.16 indicates Positive momentum. The RSI at 35.44 is Neutral, neither overbought nor oversold. The STOCH value of 13.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNVS.

Cineverse Risk Analysis

Cineverse disclosed 30 risk factors in its most recent earnings report. Cineverse reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Cineverse Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNVS	62 Neutral	$44.74M	―	-29.22%	―	39.86%	3.86%
Sector *	58 Neutral	$27.01B	3.11	-10.53%	4.44%	2.30%	-43.13%
MNY	56 Neutral	$28.67M	―	-218.25%	―	345.36%	-650.95%
BODI	51 Neutral	$37.94M	―	-129.17%	―	-20.55%	57.03%
SCOR	47 Neutral	$26.28M	―	-27.19%	―	-4.12%	22.94%
KORE	46 Neutral	$37.59M	―	174.77%	―	7.00%	31.92%
RDI	35 Underperform	$38.59M	―	-245.80%	―	-5.48%	-14.32%

* Communication Services Sector Average

Performance Comparison

CNVS

Cineverse

2.80

1.39

98.58%

SCOR

comScore

5.64

-10.32

-64.66%

RDI

Reading International

1.26

-0.58

-31.52%

MNY

MoneyHero Limited

0.70

-1.34

-65.69%

KORE

KORE Group Holdings

2.21

-1.29

-36.86%

BODI

Beachbody Company

5.43

-5.37

-49.72%

Cineverse Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -37.50% | Next Earnings Date: Jul 15, 2025

Earnings Call Sentiment Positive

The earnings call was overwhelmingly positive, highlighting record revenue and net income driven by the success of Terrifier 3, strong financial health with zero debt, and promising growth in streaming and digital revenues. Although SG&A expenses increased, the overall outlook is optimistic with plans to expand the film slate using a proven model.

Highlights

Record Revenue and Net Income

Cineverse recorded $40.7 million in total revenues, a 207% increase from the same quarter last year, and generated a net income of $7.2 million, a $9.9 million increase from the prior year quarter.

Terrifier 3 Success

Terrifier 3 became the highest grossing non-rated film ever with more than $54 million at the domestic box office. It was marketed with only a $500,000 out-of-pocket spend.

Strong Balance Sheet

Cineverse had over $13 million in cash on hand and zero debt, with a full $7.5 million available on their line of credit.

Growth in Streaming and Digital Revenues

Year-over-year, streaming and digital revenues grew by 48%, and podcast and other revenue grew by 138%.

Expansion of Film Slate

Cineverse plans to release more films, including Silent Night, Deadly Night, Toxic Avenger, and Wolf Creek: Legacy, following a successful model with favorable economics.

Lowlights

Increased SG&A Expenses

SG&A expenses for the quarter were $9.4 million, an increase of $3 million from the prior year quarter, primarily due to expenses associated with Terrifier 3.

Dependency on Terrifier 3

The unprecedented success of Terrifier 3 was a major catalyst for the record revenue, indicating a potential risk if future films do not perform as well.

Company Guidance

During the Cineverse Third Quarter Fiscal 2025 Financial Results Conference Call, the company reported record-breaking metrics, with total revenues reaching $40.7 million, a significant increase of $27.5 million compared to the prior year quarter. Net income soared to $7.2 million, marking a $9.9 million rise from the previous year, while adjusted EBITDA was reported at $10.8 million, up by $9 million. Cineverse also achieved an operating margin of 48%, within their targeted range of 45% to 50%. The company highlighted their strong balance sheet with over $13 million in cash on hand and zero debt. The impressive revenue growth was largely attributed to the success of "Terrifier 3," which became the highest-grossing non-rated film ever with over $54 million at the domestic box office. The company also noted significant year-over-year growth in their streaming and digital revenues by 48% and podcast and other revenue by 138%. Additionally, Cineverse surpassed analyst consensus guidance in revenue, net income, diluted EPS, and adjusted EBITDA. Looking forward, the company anticipates a material increase in revenue for the fiscal fourth quarter compared to the prior year, driven by continued strong financial performance and strategic growth initiatives.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.