BofA Downgrades Curiositystream After Share Rally

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While Curiositystream Inc’s CURI shares have rallied since mid-May, the company’s long-term prospects have not fundamentally changed, according to BofA Securities.

The Curiositystream Analyst: Devin Brisco downgraded the rating for Curiositystream from Buy to Underperform, while keeping the price target unchanged at $14.

The Curiositystream Thesis: The stock’s preliminary addition into the Russell 3000 index is a positive and the company is poised to benefit from 90% of its full-year revenue guidance being “committed and contractual,” Brisco said in the downgrade note.

He added there were risks and headwinds that could “limit share price appreciation in the near/medium term.”

The analyst enumerated these:

  • Limited visibility into quarterly revenue trends till year-end and beyond
  • High investment in efforts to drive top-line growth
  • Gross margins are likely to contract “as pre-licensing agreements become a larger portion of revenue mix”
  • Curiositystream is an early-stage company, with EBITDA missing Street expectations in each of its last three quarters as a public company
  • Tough COVID-19 comps are expected in the second quarter, which is “likely lead to higher DTC (direct to consumer) churn”
  • Peers are “accelerating content investments and consolidating”

CURI Price Action: Shares of Curiositystream had declined by 12.03% to $13.02 at the time of publication Friday.

(Photo by Phillip Goldsberry on Unsplash)

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Posted In: Analyst ColorDowngradesSmall CapAnalyst RatingsBofA Securitiesdocumentariesfilmmoviesstreaming. Devin Brisco
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