Paramount Global Suffers in Video Streaming Sector Despite Hit Shows
January 16, 2023
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Paramount Global ($NASDAQ:PARA) is a global media company that produces and distributes content across multiple platforms. The company’s primary business is providing films, television series, and documentaries, both domestically and internationally. Paramount has been a leader in the video streaming sector, offering a direct-to-consumer (DTC) streaming service with a broad selection of films and television series. Despite the success of their hit shows, Paramount Global has suffered significantly in the video streaming sector this year. The increasing cost of content has made it difficult for their DTC service to become profitable. With the media industry becoming increasingly competitive, it has become more difficult to attract new subscribers at a lower cost. This has put Paramount in a difficult position, as they have reached maturity while still facing the high cost of content.
The company’s stock price has been volatile this year due to the uncertain future of their DTC service. While Paramount has made strides in creating a diversified portfolio of content, the market still remains highly competitive. This has caused investors to remain skeptical about the future success of Paramount’s business model. Overall, my investment thesis is Neutral on the stock until the media industry becomes less competitive and attracts lower cost subscribers. While Paramount’s content portfolio is strong, the high cost of content continues to be a major obstacle for the company. Until this issue is addressed, I would recommend investors to remain cautious before investing in Paramount Global stock.
Stock Price
On Monday, PARAMOUNT GLOBAL stock opened at $19.2 and closed the day at $19.6, a 2.7% increase from the previous closing price of 19.0. While the stock saw a brief uptick in value, the overall outlook for Paramount Global remains uncertain. The video streaming sector has seen immense growth over the past few years, with other companies such as Netflix and Hulu dominating the market. Paramount Global has had difficulty competing in this space, despite having hit shows such as “Jack Ryan” and “The Morning Show”. To make matters worse, Paramount Global has had to compete with streaming giants such as Amazon Prime Video and Disney+ that have much larger user bases and budgets. Paramount Global is trying to make up ground in the streaming market by offering exclusive content and discounts on its services.
However, these efforts have yet to pay off and the company is still lagging behind its competitors. Paramount Global is also investing in developing new technologies such as artificial intelligence and virtual reality to help them stay competitive. Ultimately, the future of Paramount Global remains uncertain and will depend on their ability to adapt to the changing market and produce quality content that viewers want to watch. The company needs to stay ahead of the competition and make sure it can keep up with the ever-growing demand for streaming services. Only then will it be able to survive in the highly competitive video streaming sector. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Paramount Global. More…
| Total Revenues | Net Income | Net Margin |
| 30.02k | 3.14k | 4.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Paramount Global. More…
| Operations | Investing | Financing |
| -373 | 2.03k | -2.93k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Paramount Global. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 57.29k | 34.15k | 34.9 |
Key Ratios Snapshot
Some of the financial key ratios for Paramount Global are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 25.2% | -0.6% | 15.6% |
| FCF Margin | ROE | ROA |
| -2.4% | 12.9% | 5.1% |
VI Analysis
PARAMOUNT GLOBAL is a strong and stable company, as evidenced by its fundamentals. The VI Star Chart shows that PARAMOUNT GLOBAL has strong dividend and growth potential, and medium asset and profitability. This company also falls into the ‘gorilla’ type of company, which is a company that has achieved high and stable revenue or earnings growth due to its competitive advantage. Investors interested in such companies would likely be those looking for long-term stability and growth potential. They would be investors that are looking to maximize returns while minimizing risk. Furthermore, PARAMOUNT GLOBAL has a high health score of 8/10 in regards to its cashflows and debt, which indicates that the company is more than capable of sustaining future operations even during times of crisis. In conclusion, PARAMOUNT GLOBAL appears to be a strong and stable company with great potential for both dividend and growth investors. Its high health score makes it a great option for those looking for a safe long-term investment. More…
VI Peers
Paramount Global is one of the leading entertainment companies in the world. It has a strong presence in the film and television industry and competes with the likes of The Walt Disney Co, Lions Gate Entertainment Corp, and Netflix Inc. The company has a diversified portfolio of businesses that includes film production and distribution, television programming and syndication, home entertainment, theme parks, and consumer products.
– The Walt Disney Co ($NYSE:DIS)
Walt Disney Co is a publicly traded company with a market cap of 186.02B as of 2022. The company has a return on equity of 4.53%. Walt Disney Co is a diversified entertainment company that operates in four business segments: media networks, parks and resorts, studio entertainment, and consumer products. The company was founded in 1923 and is headquartered in Burbank, California.
– Lions Gate Entertainment Corp ($NYSE:LGF.B)
Lions Gate Entertainment Corp is a Canadian entertainment company with a market cap of 1.71B as of 2022. The company has a Return on Equity of -1.61%. Lions Gate is a leading global entertainment company with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, digital distribution, new channel platforms and international distribution and sales. The company’s motion picture business includes the production, financing and distribution of motion pictures through its Lionsgate and Summit Entertainment labels, as well as through its Pantelion Films joint venture with Televisa. Lionsgate’s television business includes the production, financing and distribution of television series, telefilms and other programming through its Lionsgate Television, Lionsgate UK and Debmar-Mercury subsidiaries.
– Netflix Inc ($NASDAQ:NFLX)
Netflix, Inc. is an American publicly traded streaming entertainment company founded in 1997 by Reed Hastings and Marc Randolph. The company’s primary business is a subscription-based streaming service offering online streaming from a library of films and television series, including those produced in-house.
Summary
Paramount Global has experienced a downturn in the video streaming sector due to increased competition. Despite their success in creating hit shows, the company has failed to capitalize on the streaming boom and has seen its stock price drop as a result. Investors are advised to keep a close eye on Paramount Global, as the company may be able to turn things around. Paramount Global needs to differentiate itself from other streaming services and create more compelling programming options if it hopes to reverse its fortunes and return to profitability.
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