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Paramount Global Class B (PARA)
NASDAQ:PARA
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Paramount Global Class B
(NASDAQ:PARA)
61Neutral
Positive Factors
Content Slate
Paramount Global's direct-to-consumer business is expected to benefit from the company's upcoming content slate and continued average revenue per user gains.
Financial Management
Improved cash flow and balance sheet with the company generating $489 million of free cash flow.
Subscriber Growth
Paramount+ shows strong growth momentum with a 16% revenue increase and the addition of over 5 million net new customers.
Negative Factors
Cord-Cutting Impact
TV Media segment revenues are expected to decline further due to cord-cutting and recent renewals, affecting the financial outlook.
Profitability Concerns
Concerns remain over the long-term profit potential of Paramount's streaming business despite current growth.
TV Media Challenges
The TV Media segment of Paramount Global is facing headwinds from recent affiliate agreements and general ecosystem pressures.
Paramount Global Class B (PARA) vs. S&P 500 (SPY)
Market Cap
$7.89B
Dividend Yield1.81%
Average Volume (3M)9.83M
Price to Earnings (P/E)―
Beta (1Y)0.81
Revenue Growth-1.48%
EPS Growth-450.15%
CountryUS
Employees18,600
SectorCommunication Services
Sector Strength73
IndustryEntertainment
Share Statistics
EPS (TTM)-9.32
Shares Outstanding630,007,600
10 Day Avg. Volume10,355,177
30 Day Avg. Volume9,826,898
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.27
Price to Cash Flow (P/CF)11.80
P/FCF Ratio11.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.33Price Target Upside11.38% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering15
Paramount Global Class B Business Overview & Revenue Model
Company DescriptionParamount Global operates as a media and entertainment company worldwide. The company distributes a schedule of news and public affairs broadcasts, and sports and entertainment programming; acquires or develops, and schedules programming on the CBS Television Network that includes primetime comedies and dramas, reality, specials, kids' programs, daytime dramas, game shows, and late night programs; produces or distributes talk shows, court shows, game shows, and newsmagazines; owns and operates 29 broadcast television stations; and operates CBS Sports Network, a 24-hour cable channel that provides sports and related content, as well as streaming and cable subscription services. It also operates Paramount+, a digital subscription video on-demand and live streaming services; and creates and acquires programming for distribution and viewing on various media platforms, including subscription cable networks, subscription streaming, and premium and basic cable networks. In addition, the company develops, produces, finances, acquires, and distributes films. Paramount Global was formerly known as ViacomCBS Inc. and changed its name to Paramount Global in February 2022. The company was incorporated in 1986 and is headquartered in New York, New York. Paramount Global operates as a subsidiary of National Amusements, Inc.
How the Company Makes MoneyParamount Global makes money primarily through advertising revenue, subscription fees, and content licensing. Advertising revenue is generated from the sale of commercial time during its television broadcasts and digital platforms. Subscription fees come from its streaming services, such as Paramount+, which offer consumers access to a vast library of content for a recurring fee. Additionally, the company earns revenue by licensing its content to third-party distributors and platforms, including international markets. Partnerships with cable and satellite providers also contribute to its earnings, as they distribute Paramount's channels and content to a broader audience. The company's film production arm, Paramount Pictures, generates revenue through box office sales, digital downloads, and home entertainment sales.
Paramount Global Class B Financial Statement Overview
Summary
Paramount Global Class B is experiencing financial challenges characterized by declining revenues and profitability. The balance sheet reflects moderate stability with manageable leverage, but the declining equity and negative returns pose risks. Cash flow shows some improvements but remains volatile.Income Statement
Paramount Global Class B has experienced a declining trend in its income statement metrics. The revenue has decreased from $30.15 billion in 2022 to $29.21 billion in 2024, indicating negative growth. Gross profit margin has also decreased, and the company has reported negative EBIT and EBITDA margins in 2024, reflecting poor operational efficiency. The net profit margin is negative due to significant net income losses over the past two years.45
Neutral
Balance Sheet
The balance sheet shows a moderate level of stability with a debt-to-equity ratio of 0.95 in 2024, which indicates manageable leverage. However, the stockholders' equity has declined over the years, and return on equity is negative due to continuous net losses. The equity ratio has decreased, reflecting a higher reliance on debt financing over equity.50
Neutral
Cash Flow
Cash flow analysis shows some positive aspects, with free cash flow improving from negative to positive in recent years. The operating cash flow to net income ratio is favorable, demonstrating efficient cash generation from operations. However, the free cash flow growth rate is volatile, and reliance on financing activities is evident.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 29.21B | 29.65B | 30.15B | 28.59B | 25.29B | Gross Profit |
| 9.78B | 7.26B | 10.31B | 10.84B | 10.29B | EBIT |
| -5.27B | -451.00M | 2.34B | 4.06B | 4.14B | EBITDA |
| -4.92B | 85.00M | 2.60B | 4.39B | 15.62B | Net Income Common Stockholders |
| -6.19B | -608.00M | 1.10B | 4.54B | 2.42B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.66B | 2.46B | 2.88B | 6.27B | 2.98B | Total Assets |
| 46.17B | 53.54B | 58.39B | 58.62B | 52.66B | Total Debt |
| 15.55B | 15.86B | 17.27B | 19.31B | 21.32B | Net Debt |
| 12.89B | 13.40B | 14.39B | 13.04B | 18.33B | Total Liabilities |
| 29.39B | 30.49B | 34.79B | 35.65B | 36.61B | Stockholders Equity |
| 16.32B | 22.53B | 23.04B | 22.40B | 15.37B |
| Cash Flow | Free Cash Flow | |||
| 489.00M | 147.00M | -139.00M | 599.00M | 1.97B | Operating Cash Flow |
| 752.00M | 475.00M | 219.00M | 953.00M | 2.29B | Investing Cash Flow |
| 12.00M | 942.00M | -526.00M | 2.40B | 56.00M | Financing Cash Flow |
| -507.00M | -1.84B | -2.98B | -152.00M | -90.00M |
Paramount Global Class B Technical Analysis
Negative
11.07
Price Trends
11.34
Negative
11.03
Positive
10.82
Positive
Market Momentum
0.13
Positive
53.53
Neutral
44.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PARA, the sentiment is Negative. The current price of 11.07 is below the 20-day moving average (MA) of 11.67, below the 50-day MA of 11.34, and above the 200-day MA of 10.82, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 53.53 is Neutral, neither overbought nor oversold. The STOCH value of 44.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PARA.
Paramount Global Class B Risk Analysis
Paramount Global Class B disclosed 42 risk factors in its most recent earnings report. Paramount Global Class B 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
Paramount Global Class B Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $21.61B | 10.64 | 20.09% | 1.08% | 4.29% | 177.70% | |
76 Outperform | $151.00B | 27.12 | 5.54% | 1.14% | 3.97% | 89.53% | |
74 Outperform | $15.34B | 30.25 | 100.20% | 2.41% | 0.75% | 9.36% | |
74 Outperform | $366.10B | 43.16 | 38.43% | ― | 15.28% | 65.72% | |
61 Neutral | $7.89B | ― | -31.94% | 1.81% | -1.48% | -450.15% | |
58 Neutral | $25.21B | 3.07 | -13.86% | 4.29% | 2.47% | -43.03% | |
58 Neutral | $19.81B | ― | -28.54% | ― | -4.91% | -259.71% |
* Communication Services Sector Average
Performance Comparison
PARA
Paramount Global Class B
11.07
0.21
1.93%
DIS
Walt Disney
83.53
-32.77
-28.18%
NFLX
Netflix
855.86
227.45
36.19%
FOXA
Fox
49.73
18.87
61.15%
WMG
Warner Music Group
29.48
-4.85
-14.13%
WBD
Warner Bros
8.07
-0.45
-5.28%
Paramount Global Class B Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -0.90% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a mixture of strong performance in the D2C segment, significant subscriber growth, and improvement in financial metrics. However, there were challenges with declining TV Media revenue and affiliate revenue pressures. Despite these challenges, the overall growth in profitability and strategic successes point to a positive outlook.Highlights
Record Increase in Adjusted OIBDA
Adjusted OIBDA increased by 30% year-over-year to $3.1 billion, driven by significant improvements in the D2C segment and overall financial health.
Paramount+ Subscriber Growth
Paramount+ added 10 million new subscribers in 2024, with 5.6 million added in Q4 alone. Engagement improved, with global watch time per user increasing by 20%.
D2C Profitability Improvement
Direct-to-Consumer segment profitability improved by $1.2 billion for the year, showing a significant reduction in losses and setting up for future profitability.
Successful Franchise Strategy
The Sonic the Hedgehog franchise exceeded $1.2 billion at the global box office, with Sonic 3 becoming the highest-grossing film in the series.
Strong Performance of Original Series
Paramount+ achieved a new high, ranking as the number two domestic SVOD for hours watched across all original series, helped by popular shows like Landman and Lioness.
Positive Free Cash Flow
The company generated $489 million in free cash flow, the highest in four years, signaling strong financial management and operational efficiencies.
Lowlights
Decline in TV Media Revenue
TV Media revenue declined by 4% in Q4, largely due to ongoing challenges in the linear ecosystem affecting affiliate and advertising revenues.
DTC Segment Loss in Q4
Despite improvements over the year, the D2C segment reported a loss of $286 million in Q4 due to content slate seasonality.
Challenges in Affiliate Revenue
The rate of decline in affiliate revenue is expected to increase in Q1 2025, impacted by recent renewals and changes in the pay-TV ecosystem.
Impact of Super Bowl and Political Advertising
Expectations for 2025 include a headwind from the absence of the Super Bowl and political advertising, which significantly benefited 2024 results.
Company Guidance
During Paramount Global's Q4 2024 earnings call, the company provided guidance for the upcoming year, emphasizing a transformative and profitable year with significant improvements in their direct-to-consumer (D2C) segment. Total company adjusted OIBDA grew by 30% year-over-year, reaching $3.1 billion, while free cash flow increased to $489 million, the highest in four years. Paramount+ added 10 million new subscribers in 2024, with a record 5.6 million in Q4, driven by high engagement and a 20% increase in global watch time per user. This led to a 33% rise in revenues, supported by a strong content slate. The company plans to reach full-year domestic profitability for Paramount+ in 2025. Additionally, advertising revenue in the D2C segment increased by 18%, and TV Media licensing revenue grew by 3%. Paramount also highlighted their strategy to leverage content assets, with a focus on sports, franchise films, and original streaming content to drive future growth.Paramount Global Class B Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Paramount Global Adopts Executive Compensation Strategy Amidst Deal
Neutral
Dec 27, 2024
Paramount Global has approved the immediate vesting and settlement of restricted and performance share units for certain executives to mitigate the impact of potential ‘excess parachute payments’ under Section 280G of the Internal Revenue Code. This strategy aims to prevent financial penalties or implications for both the executives and the company in light of their transaction agreement with Skydance Media and New Pluto Global, Inc., enhancing their operational flexibility and securing executive interests.
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.