Reservoir Media (RSVR) AI Stock Analysis

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Reservoir Media

(NASDAQ:RSVR)

62Neutral

Reservoir Media demonstrates strong financial performance with revenue and profit growth, supported by strategic acquisitions and improved guidance. However, the high debt level and increased operating and interest expenses present financial risks. Technical indicators suggest a bearish trend, and the high P/E ratio points to potential overvaluation. These mixed factors lead to an overall score of 62.

Reservoir Media (RSVR) vs. S&P 500 (SPY)

Market Cap

$467.72M

Dividend YieldN/A

Average Volume (3M)38.33K

Price to Earnings (P/E)60.0

Beta (1Y)0.79

Revenue Growth11.32%

EPS Growth3803.23%

CountryUS

Employees99

SectorCommunication Services

Sector Strength82

IndustryEntertainment

Share Statistics

EPS (TTM)0.12

Shares Outstanding65,232,560

10 Day Avg. Volume37,349

30 Day Avg. Volume38,332

Financial Highlights & Ratios

PEG Ratio0.02

Price to Book (P/B)N/A

Price to Sales (P/S)3.86

Price to Cash Flow (P/CF)10.60

P/FCF Ratio7.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$15.00

Price Target Upside107.47% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Reservoir Media Business Overview & Revenue Model

Company DescriptionReservoir Media (RSVR) is a leading independent music company that engages in the acquisition and management of music catalogs. The company operates primarily in the music publishing and recorded music sectors, offering a diverse array of services that include licensing, royalty collection, and creative development for artists and songwriters. Reservoir Media is committed to nurturing a wide range of musical talent, working with both iconic and emerging artists across various genres.

How the Company Makes MoneyReservoir Media generates revenue through multiple streams within the music industry. The primary source of revenue is music publishing, where the company earns money by acquiring rights to song catalogs and collecting royalties whenever these songs are played on radio, used in movies or TV shows, streamed online, or covered by other artists. Additionally, Reservoir Media earns income from recorded music by owning and managing masters, which involves licensing recordings for use in various media. The company also leverages its extensive network and partnerships to facilitate collaborations and placements that further enhance its revenue potential. Key factors contributing to Reservoir's earnings include strategic acquisitions of high-value catalogs and effective management of its diverse portfolio.

Reservoir Media Financial Statement Overview

Summary

Reservoir Media shows strong revenue growth and operational efficiency. However, the moderate debt burden and need for better cost management are concerns. Cash flow is robust, supporting strategic flexibility.

Income Statement

Positive

Reservoir Media shows strong revenue growth with a TTM revenue of $117.33 billion, up significantly from previous years. The gross profit margin is healthy at approximately 63.18% for TTM, suggesting good profitability from core operations. However, the net profit margin of 4.33% indicates potential cost management issues or high operating expenses. EBIT and EBITDA margins also reflect strong operational efficiency.

Balance Sheet

Positive

The debt-to-equity ratio is approximately 1.05 (TTM), indicating a moderate level of leverage. While stockholders' equity is substantial at $359.51 billion, the high total debt level may pose risks if revenues decline. The equity ratio stands at 43.18%, reflecting a solid equity base relative to total assets, which enhances financial stability.

Cash Flow

Positive

Operating cash flow is robust at $33.12 billion (TTM), highlighting strong cash generation capabilities. The free cash flow growth rate is positive, indicating effective management of expenditures and investments. However, the free cash flow to net income ratio is high, suggesting reliance on cash flow rather than net income for financing activities.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
156.43M	144.86M	122.29M	107.84M	80.25M	63.24M
	Gross Profit
86.15M	89.38M	74.30M	63.65M	47.39M	35.93M
	EBIT
33.41M	24.58M	21.06M	19.35M	18.33M	15.48M
	EBITDA
58.28M	47.25M	43.13M	38.38M	32.41M	23.90M
	Net Income Common Stockholders
5.09B	644.94K	2.54M	13.08M	9.25M	6.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.76B	18.13M	14.90M	17.81M	9.21M	25.00K
	Total Assets
832.37B	783.53M	754.08M	684.27M	461.86M	25.00K
	Total Debt
377.72B	337.51M	318.56M	269.86M	212.53M	180.34M
	Net Debt
359.96B	319.38M	303.66M	252.04M	203.32M	180.32M
	Total Liabilities
471.58B	429.05M	404.42M	336.82M	267.49M	1.23K
	Stockholders Equity
359.51B	352.99M	348.36M	346.39M	193.36M	23.77K
Cash Flow		Free Cash Flow
33.06B	-14.16M	-41.03M	-181.88M	-103.89M	11.35M
	Operating Cash Flow
33.12B	36.19M	31.20M	12.48M	14.71M	11.88M
	Investing Cash Flow
-71.93B	-50.55M	-72.23M	-196.82M	-118.61M	-107.81M
	Financing Cash Flow
38.50B	17.56M	38.46M	196.53M	47.22M	147.03M

Reservoir Media Technical Analysis

Technical Analysis Sentiment

Negative

Last Price7.23

Price Trends

50DMA

7.44

Negative

100DMA

8.02

Negative

200DMA

8.04

Negative

Market Momentum

MACD

-0.09

Negative

RSI

47.43

Neutral

STOCH

71.56

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RSVR, the sentiment is Negative. The current price of 7.23 is above the 20-day moving average (MA) of 7.18, below the 50-day MA of 7.44, and below the 200-day MA of 8.04, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 47.43 is Neutral, neither overbought nor oversold. The STOCH value of 71.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RSVR.

Reservoir Media Risk Analysis

Reservoir Media disclosed 37 risk factors in its most recent earnings report. Reservoir Media 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

Reservoir Media Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMG	64 Neutral	$15.20B	29.98	100.20%	2.43%	0.75%	9.36%
RSVR	62 Neutral	$467.72M	60.05	2.22%	―	11.32%	3803.23%
Sector *	59 Neutral	$13.73B	6.72	-2.47%	3.83%	2.30%	-35.22%
DLPN	47 Neutral	$12.17M	―	-79.76%	―	19.85%	41.89%
SIRI	44 Neutral	$7.23B	―	-37.33%	5.02%	-2.84%	-249.80%
KUKE	41 Neutral	$16.81M	―	-109.46%	―	―	―
ANGH	33 Underperform	$19.01M	―	-80.27%	―	13.03%	19.07%

* Communication Services Sector Average

Performance Comparison

RSVR

Reservoir Media

7.17

-1.93

-21.21%

SIRI

Sirius XM Holdings

21.67

-7.40

-25.46%

DLPN

Dolphin Entertainment

1.09

-1.31

-54.58%

WMG

Warner Music Group

29.83

-1.86

-5.87%

ANGH

Anghami Inc.

0.64

-0.49

-43.36%

KUKE

Kuke Music Holding

4.10

-20.90

-83.60%

Reservoir Media Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -11.07% | Next Earnings Date: May 29, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance by Reservoir Media with significant revenue growth, improved EBITDA, and strategic acquisitions. However, this was tempered by increased operating expenses and interest costs, along with a decline in neighboring rights revenue. The overall sentiment is optimistic due to the raised guidance and Grammy recognition, despite some financial challenges.

Highlights

Strong Revenue Growth

Reservoir Media reported a total revenue of $42.3 million for the third quarter of fiscal year 2025, representing a 19% improvement over the same period last year. This growth was driven by a 16% increase in music publishing revenue and a 20% increase in recorded music revenue.

Significant Improvement in EBITDA

The company achieved an adjusted EBITDA of $17.3 million, marking a 26% improvement from the year-ago quarter, due to effective cost management and increased revenues.

Successful Catalog Acquisitions

Reservoir Media deployed over $70 million in catalog acquisitions year-to-date, securing notable talents such as Snoop Dogg and k.d. lang, and acquiring the rights to the catalog of Grammy Award-winning composer Lebohang Morake.

Increased Guidance for Fiscal 2025

The company raised its full-year revenue guidance to $155 million - $158 million and adjusted EBITDA guidance to $61.5 million - $64.5 million, reflecting confidence in continued growth.

Grammy Awards Recognition

Reservoir celebrated six wins across its roster at the 2025 Grammy Awards, highlighting the company's successful management and creative efforts.

Lowlights

Higher Operating Expenses

Total costs increased by 13% compared to the prior year quarter, driven by a 17% increase in administration expenses and a 14% increase in the cost of revenue.

Decline in Neighboring Rights Revenue

Recorded music revenue growth was partially offset by a modest decline in neighboring rights revenue, indicating challenges in this revenue stream.

Increased Interest Expenses

Interest expense for the quarter rose to $5.8 million, an increase of $405,000 from the prior year, due to increased borrowings to support M&A strategy and higher effective interest rates.

Company Guidance

During the call, Reservoir Media provided guidance for the fiscal year 2025, highlighting strong financial performance in the third quarter. The company reported total revenue of $42.3 million, marking a 19% improvement from the previous year, driven by a 16% increase in music publishing revenue and a 20% increase in recorded music revenue. The adjusted EBITDA was $17.3 million, a 26% increase year-over-year. Reservoir also announced an increase in their full-year revenue guidance range to $155 million to $158 million and adjusted EBITDA guidance to $61.5 million to $64.5 million, implying growth of 8% and over 13% respectively. The company's strategy focuses on growing its music portfolio through acquisitions, with over $70 million deployed in catalog acquisitions year-to-date, and they maintain a robust pipeline of off-market deals.

Reservoir Media Corporate Events

Business Operations and StrategyFinancial Disclosures

Reservoir Media Releases Investor Presentation on Strategic Goals

Neutral

Feb 19, 2025

On February 19, 2025, Reservoir Media, Inc. made an investor presentation available on its website, outlining various forward-looking statements about future opportunities and strategic goals for their business. The presentation included unaudited financial information and non-GAAP financial measures, with a disclaimer regarding the reliability of forward-looking statements and third-party data.

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.