UPDATE: BofA Securities Downgrades CuriosityStream Inc. (CURI) to Underperform
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BofA Securities downgraded CuriosityStream Inc. (NASDAQ: CURI) from Buy to Underperform with a price target of $14.00.
The analyst comments "...while CURI will certainly benefit from the fact that 90% of its full year revenue guidance of $71mn is committed and contractual, we believe the following risks/headwinds could limit share price appreciation in the near/medium term: (1) visibility into quarterly revenue trends over the course of this year and thereafter is limited, particularly sponsorship and licensing streams; (2) investment activity into the business remains elevated in efforts to drive top-line growth while gross margins are likely to narrow as pre-licensing agreements become a larger portion of revenue mix; (3) CURI is still a very early stage company and EBITDA has come in below consensus expectations in each of its last 3 quarters as a public company, which should lead to a discount placed on projected forward EBITDA until visibility improves; (4) tough COVID comps in 2QE will likely lead to higher DTC (direct to consumer) churn; and (5) peers are accelerating content investments and consolidating (e.g., Amazon/MGM studios and Warner Bros. Discovery)—although as an offset we note that increased consolidation could also potentially make CURI an attractive acquisition candidate."
Shares of CuriosityStream Inc. closed at $14.80 yesterday.
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