Cumulus Media (CMLS) AI Stock Analysis

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Cumulus Media

(OTC:CMLS)

Rating:35Underperform

Price Target:―

Cumulus Media's overall stock score is significantly impacted by its weak financial performance characterized by declining revenues, high leverage, and net losses. While there are some positives in digital growth and cost management from the earnings call, the challenges in the broadcast segment and a poor valuation outlook weigh heavily on the score.

Positive Factors

Cost Management

Management has been diligent in reducing its fixed cost base, making room for growing variable expense tied to its digital businesses, executing on $35 million in cost reduction in Q4.

Digital Growth

The DMS business has been the main source of growth in the digital segment, growing 30% in the quarter, and is expected to grow at a similar pace in Q2.

Negative Factors

Ad Sales Headwind

The end of an ad sales relationship towards year end is expected to be a $15 million headwind for 2025.

Cash Flow Pressure

The company has $24 million of principle due next year, and the difficult ad environment is a strain on cash flow trends.

Macro Uncertainty

Macro uncertainty, particularly around tariffs and rates were noted as adding to uncertainty and pressuring ad spend, in addition to the shorter-term challenges from the loss of some content relationships.

Cumulus Media (CMLS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$14.92M

Dividend YieldN/A

Average Volume (3M)648.60K

Price to Earnings (P/E)―

Beta (1Y)1.13

Revenue Growth-2.92%

EPS Growth-165.37%

CountryUS

Employees2,250

SectorCommunication Services

Sector Strength86

IndustryBroadcasting

Share Statistics

EPS (TTM)-1.88

Shares Outstanding17,128,042

10 Day Avg. Volume109,143

30 Day Avg. Volume648,601

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)-0.07

Price to Sales (P/S)0.00

P/FCF Ratio-0.22

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering2

Cumulus Media Business Overview & Revenue Model

Company DescriptionCumulus Media Inc. (CMLS) is one of the largest audio-first media companies in the United States. It operates in the radio broadcasting sector, providing a wide array of content through its extensive portfolio of FM and AM radio stations. The company also owns and operates the Westwood One network, which produces and distributes various syndicated programming. In addition to traditional radio, Cumulus Media offers digital streaming and podcasting services, catering to a diverse audience across multiple platforms.

How the Company Makes MoneyCumulus Media primarily generates revenue through advertising sales across its radio stations and digital platforms. As advertisers seek to reach large and varied audiences, Cumulus provides valuable advertising inventory on its local and national radio broadcasts, as well as through digital audio content like podcasts and streaming. The company also earns revenue from content syndication via its Westwood One network, which sells programming to other broadcasters. Additionally, Cumulus Media may engage in strategic partnerships and sponsorship deals that further contribute to its income.

Cumulus Media Financial Statement Overview

Summary

Cumulus Media faces significant financial challenges with declining revenues, high leverage, and net losses. The negative equity and cash flow issues pose substantial risks, although there are slight improvements in operating cash flow. Urgent strategic and operational adjustments are needed to stabilize and improve financial health.

Income Statement

Negative

Cumulus Media is experiencing declining revenue and negative profitability. TTM (Trailing-Twelve-Months) revenue decreased compared to the previous periods, with a current gross profit margin of 68.84%. The company reported significant net losses, and negative EBIT and EBITDA margins, indicating operational challenges.

Balance Sheet

Very Negative

The balance sheet shows high leverage with a debt-to-equity ratio of -31.82 due to negative stockholders' equity, indicating financial instability. Return on equity is not meaningful given the negative equity. The equity ratio is also negative, highlighting potential solvency issues.

Cash Flow

Negative

The company shows some improvement in operating cash flow to net income ratio, but overall free cash flow remains negative. The free cash flow to net income ratio is also negative, suggesting difficulties in generating cash relative to net losses.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
814.37M	827.08M	844.55M	953.51M	916.47M	816.22M
	Gross Profit
481.17M	502.83M	511.19M	596.03M	557.78M	479.14M
	EBIT
-241.65M	-239.66M	-41.28M	79.79M	69.12M	21.40M
	EBITDA
-176.86M	-158.52M	35.85M	158.40M	119.65M	59.51M
	Net Income Common Stockholders
-301.47M	-283.25M	-117.88M	16.23M	17.28M	-59.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
52.69M	63.84M	80.66M	107.43M	177.03M	271.76M
	Total Assets
1.07B	1.12B	1.44B	1.61B	1.72B	1.86B
	Total Debt
790.40M	794.71M	813.08M	862.35M	952.96M	1.13B
	Net Debt
737.71M	730.87M	732.42M	754.92M	775.93M	858.54M
	Total Liabilities
1.10B	1.11B	1.15B	1.20B	1.30B	1.46B
	Stockholders Equity
-24.84M	6.95M	286.58M	408.40M	419.50M	397.59M
Cash Flow		Free Cash Flow
-7.95M	-22.58M	6.85M	47.42M	39.43M	18.34M
	Operating Cash Flow
8.89M	-3.12M	31.66M	78.48M	68.52M	33.21M
	Investing Cash Flow
-16.02M	-4.23M	-6.82M	-26.24M	-1.54M	64.36M
	Financing Cash Flow
-8.51M	-9.47M	-51.61M	-121.84M	-161.71M	157.19M

Cumulus Media Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.15

Price Trends

50DMA

0.29

Negative

100DMA

0.54

Negative

200DMA

0.86

Negative

Market Momentum

MACD

-0.04

Negative

RSI

36.89

Neutral

STOCH

36.33

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMLS, the sentiment is Negative. The current price of 0.15 is below the 20-day moving average (MA) of 0.16, below the 50-day MA of 0.29, and below the 200-day MA of 0.86, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 36.89 is Neutral, neither overbought nor oversold. The STOCH value of 36.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMLS.

Cumulus Media Risk Analysis

Cumulus Media disclosed 19 risk factors in its most recent earnings report. Cumulus 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 3 New Risks

We are currently not in compliance with the continued listing standards of NASDAQ, and if we do not regain compliance, our common stock may be delisted, which could have a material adverse effect on the liquidity of our common stock. Q4, 2024

Our financial performance may be adversely affected by many factors within or beyond our control. Q4, 2024

Artificial intelligence-based platforms and technologies present new and unknown risks and challenges to our business. Q4, 2024

Cumulus Media Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXDO	76 Outperform	$161.41M	68.73	4.73%	―	13.85%	38.33%
RDCM	76 Outperform	$207.42M	24.51	9.35%	―	18.23%	81.31%
SGA	67 Neutral	$79.56M	22.16	2.06%	8.23%	-1.65%	-51.45%
Sector *	60 Neutral	$14.21B	6.47	-3.76%	3.69%	2.48%	-35.46%
MCHX	55 Neutral	$74.19M	―	-16.55%	―	-2.67%	21.65%
CMLS	35 Underperform	$14.92M	―	-243.54%	―	-2.92%	-165.37%
IHRT	34 Underperform	$171.82M	―	86.54%	―	3.31%	-39.47%

* Communication Services Sector Average

Performance Comparison

CMLS

Cumulus Media

0.13

-2.48

-95.02%

CXDO

Crexendo

5.44

2.03

59.53%

MCHX

Marchex

1.67

0.25

17.61%

RDCM

Radcom

12.76

3.61

39.45%

SGA

Saga Communications

12.35

-5.78

-31.88%

IHRT

iHeartMedia

1.23

0.36

41.38%

Cumulus Media Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: -34.78%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture for the company. There were several positive developments, particularly in the digital segment with strong growth in the digital marketing services and podcasting businesses, alongside effective cost management and AI implementation. However, these highlights were counterbalanced by significant challenges in the broadcast segment, a notable revenue decline, and broader economic and market uncertainties. The sentiment is Neutral as the highlights and lowlights are fairly balanced.

Q1-2025 Updates

Positive Updates

Digital Marketing Services Growth

The digital marketing services business grew 30% during the quarter, with total customers up 41% and average campaign order size up 16%.

Podcasting Performance

Excluding the negative comparison from the loss of the Daily Wire relationship, podcasting revenue was up close to 40%.

Streaming Business Growth

The streaming business saw a 4% increase in revenue, benefiting from the transition to an in-house sales function last year.

Cost Reductions

The company executed $7.5 million of additional annualized net fixed cost reductions in the quarter.

Leverage of AI

The company is deploying AI across various functions, including sales and customer service, to improve efficiency and cost-effectiveness.

Negative Updates

Revenue Decline

Total revenue decreased by 6.4% year-over-year, with a 3.7% decline when excluding political and the impact of the Daily Wire.

Broadcast Business Challenges

The broadcast business faced significant challenges due to new tariffs and government spending cuts, leading to pullbacks in key advertising categories like automotive and retail.

Loss of Daily Wire Relationship

The loss of the Daily Wire relationship negatively impacted digital revenue growth, contributing to a 13% decline in podcasting revenue when included.

Economic Uncertainty Impact

Ongoing economic uncertainty and consumer demand issues led to a pacing down of approximately 10% for the upcoming periods.

Company Guidance

During the first quarter of fiscal year 2025, the company reported a 6% increase in its digital businesses, despite a challenging macroeconomic environment exacerbated by new tariffs and government spending cuts. The Digital Marketing Services (DMS) segment, the fastest-growing part of the business, saw a 30% rise in revenue, driven by a 41% increase in total customers and a 16% rise in average campaign order size. Despite a 6.4% decline in total revenue, or 3.7% when excluding political and Daily Wire impacts, the company achieved $7.5 million in annualized fixed cost reductions and maintained a cash reserve of $53 million. The podcasting segment saw a 40% increase excluding the loss of the Daily Wire, while streaming grew by 4%. Broadcast advertising faced setbacks due to economic pressures, with a notable decline in automotive, retail, and CPG categories. However, insurance and financial categories performed well, alongside sports content, which achieved record revenues during the NFL playoffs and Super Bowl. The company is also leveraging AI for efficiencies in advertising proposals and customer service. Looking forward, the firm anticipates continued digital growth, projecting DMS revenue to reach over $100 million by the end of the next year, while focusing on reducing net debt and exploring asset sales to improve liquidity.

Cumulus Media Corporate Events

Executive/Board Changes

Cumulus Media Board Reshuffle: Galbraith Joins Directors

Positive

Jan 22, 2025

On January 22, 2025, Cumulus Media announced the resignation of Matthew Blank from its Board of Directors to focus on other commitments, with Steven M. Galbraith appointed as his replacement, effective immediately. Galbraith, a top shareholder and seasoned investment professional, is expected to bring valuable insights to the board, potentially enhancing the company’s growth and strategic positioning in the audio media industry.

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.