Cumulus Media (CMLS) PT Raised to $28 at B.Riley After Adding Podcast Ad Sales Revenue Stream

B.Riley analyst Daniel Day raised the price target on Cumulus Media (NASDAQ: CMLS) to $28.00 (from $22.00) after the company released an updated investor presentation
accompanied by an interview with CEO Mary Berner that highlights how the company's business is evolving from a "radio-first" to an "audio-first" approach, including the capability to sell digital audio inventory (e.g. podcast and streaming radio) alongside traditional AM/FM spots.

The analyst reiterated a Buy rating, stating "According to a recent study, while 31% of consumer media consumption is audio, less than 10% of ad budgets are currently allocated to audio, and we expect CMLS to be a beneficiary of shifting ad spend as brands/agencies follow consumer preferences and this gap is narrowed. We are raising our PT from $22 to $28 after rolling our valuation over to blended '22/'23 estimates. At the current share price, CMLS is trading at a "left for dead" valuation (4.4x EV/EBITDA and 40% LFCF yield on '22/'23 estimates) that provides an especially wide margin of safety for investors. With one of the cleanest balance sheets in the radio peer group (3.4x levered on '22E/'23E AEBITDA vs. IHRT/AUD at 4.4x/5.0x, respectively), we see CMLS looking to return capital to shareholders in the form of share repurchases (especially attractive at current share price) or a recurring dividend, with M&A that bolsters the digital side of the business also on the table."

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