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Paramount Global Class B (PARA)
NASDAQ:PARA
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Paramount Global Class B
(NASDAQ:PARA)61Neutral
Positive Factors
Content Slate and Revenue
Paramount Global's direct-to-consumer business is expected to benefit from the company's upcoming content slate and continued average revenue per user gains.
Subscriber Growth
Total Paramount+ subscribers were 77.5 million, growing 5.6 million quarter-over-quarter, benefiting from the NFL as well as scripted programming and the mix of theatrical releases hitting their streaming window.
Negative Factors
PayTV and Financial Performance
PayTV declines are a substantial headwind for Paramount Global, impacting overall financial performance.
TV Media Challenges
The TV Media segment of Paramount Global is facing headwinds from recent affiliate agreements and general ecosystem pressures.
Paramount Global Class B (PARA) vs. S&P 500 (SPY)
Market Cap
$8.15B
Dividend Yield1.77%
Average Volume (3M)9.36M
Price to Earnings (P/E)―
Beta (1Y)1.21
Revenue Growth-1.48%
EPS Growth-450.15%
CountryUS
Employees21,900
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)-9.32
Shares Outstanding630,007,600
10 Day Avg. Volume10,254,677
30 Day Avg. Volume9,364,284
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.26
Price to Cash Flow (P/CF)7.20
P/FCF Ratio8.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.50Price Target Upside8.89% Upside
Rating ConsensusHold
Number of Analyst Covering13
Paramount Global Class B Business Overview & Revenue Model
Company DescriptionParamount Global Class B (PARA) is a leading global media and entertainment company that operates across various segments, including television, streaming, digital content, and film production. The company owns and manages a diverse portfolio of renowned brands, including CBS, MTV, Nickelodeon, and Paramount Pictures, which deliver a wide range of content to audiences worldwide. Paramount Global is committed to creating premium content and experiences for its viewers, leveraging both traditional and digital platforms to reach a global audience.
How the Company Makes MoneyParamount Global makes money primarily through advertising revenue, subscription fees, and content licensing. Advertising revenue is generated from the sale of commercial time during its television broadcasts and digital platforms. Subscription fees come from its streaming services, such as Paramount+, which offer consumers access to a vast library of content for a recurring fee. Additionally, the company earns revenue by licensing its content to third-party distributors and platforms, including international markets. Partnerships with cable and satellite providers also contribute to its earnings, as they distribute Paramount's channels and content to a broader audience. The company's film production arm, Paramount Pictures, generates revenue through box office sales, digital downloads, and home entertainment sales.
Paramount Global Class B Financial Statement Overview
Summary
Paramount Global faces significant challenges in revenue and profitability with negative earnings and shrinking free cash flow, which could impact future investments and debt servicing. The balance sheet shows high leverage, but a fair equity position provides some stability. The company needs strategic measures to improve its financial health.Income Statement
Paramount Global's income statement shows declining revenues and profitability. The TTM revenue of $28.87 billion is slightly down from previous periods, indicating a revenue contraction. With a negative net income and EBITDA, profitability is a significant concern. The gross profit margin remains moderate at 30%, but the net profit margin is negative, reflecting ongoing financial challenges.40
Negative
Balance Sheet
The balance sheet shows a relatively stable financial position with a total equity of $16.63 billion. Despite a high debt-to-equity ratio of 0.94, indicating significant leverage, the equity ratio is 35.94%, suggesting a fair balance of equity financing. However, the decrease in stockholders' equity over the periods could pose a risk if not addressed.55
Neutral
Cash Flow
The company's cash flow statement reveals mixed results. The operating cash flow to net income ratio is positive, indicating some efficiency in converting earnings to cash flow. However, free cash flow has declined significantly, with a free cash flow growth rate of -48.28% compared to the previous year, highlighting potential liquidity challenges.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 28.87B | 29.65B | 30.15B | 28.59B | 25.29B | 27.81B | Gross Profit |
| 8.65B | 7.26B | 10.31B | 10.84B | 10.29B | 10.59B | EBIT |
| 1.10B | -451.00M | 2.34B | 4.06B | 4.14B | 4.27B | EBITDA |
| -4.60B | 85.00M | 2.60B | 4.39B | 15.62B | 17.16B | Net Income Common Stockholders |
| -5.72B | -608.00M | 1.10B | 4.54B | 2.42B | 3.31B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.46B | 2.46B | 2.88B | 6.27B | 2.98B | 632.00M | Total Assets |
| 53.54B | 53.54B | 58.39B | 58.62B | 52.66B | 49.52B | Total Debt |
| 15.86B | 15.86B | 17.27B | 19.31B | 21.32B | 20.63B | Net Debt |
| 13.40B | 13.40B | 14.39B | 13.04B | 18.33B | 20.00B | Total Liabilities |
| 30.49B | 30.49B | 34.79B | 35.65B | 36.61B | 36.23B | Stockholders Equity |
| 22.53B | 22.53B | 23.04B | 22.40B | 15.37B | 13.21B |
| Cash Flow | Free Cash Flow | ||||
| 762.00M | 147.00M | -139.00M | 599.00M | 1.97B | 877.00M | Operating Cash Flow |
| 1.03B | 475.00M | 219.00M | 953.00M | 2.29B | 1.23B | Investing Cash Flow |
| 973.00M | 942.00M | -526.00M | 2.40B | 56.00M | -155.00M | Financing Cash Flow |
| -1.40B | -1.84B | -2.98B | -152.00M | -90.00M | -1.22B |
Paramount Global Class B Technical Analysis
Positive
11.48
Price Trends
10.84
Positive
10.81
Positive
10.85
Positive
Market Momentum
0.17
Negative
60.42
Neutral
52.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PARA, the sentiment is Positive. The current price of 11.48 is above the 20-day moving average (MA) of 11.13, above the 50-day MA of 10.84, and above the 200-day MA of 10.85, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 60.42 is Neutral, neither overbought nor oversold. The STOCH value of 52.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PARA.
Paramount Global Class B Risk Analysis
Paramount Global Class B disclosed 20 risk factors in its most recent earnings report. Paramount Global Class B 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 0 New Risks
Paramount Global Class B Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $25.29B | 11.57 | 19.01% | 0.99% | 4.29% | 177.70% | |
77 Outperform | $134.23B | 8.57 | 18.92% | 3.45% | 1.78% | 11.62% | |
75 Outperform | $416.03B | 49.05 | 35.21% | ― | 15.28% | 65.72% | |
72 Outperform | $197.07B | 35.40 | 5.51% | 0.84% | 3.97% | 89.53% | |
61 Neutral | $8.15B | ― | -37.93% | 1.77% | -1.48% | -450.15% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
58 Neutral | $27.05B | ― | -33.18% | ― | -4.97% | -259.71% |
* Communication Services Sector Average
Performance Comparison
PARA
Paramount Global Class B
11.48
1.46
14.57%
CMCSA
Comcast
35.50
-5.26
-12.90%
DIS
Walt Disney
109.01
-2.85
-2.55%
NFLX
Netflix
972.58
374.08
62.50%
FOX
Fox
52.61
26.47
101.26%
WBD
Warner Bros
11.32
3.18
39.07%
Paramount Global Class B Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 2.32% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a mixture of strong performance in the D2C segment, significant subscriber growth, and improvement in financial metrics. However, there were challenges with declining TV Media revenue and affiliate revenue pressures. Despite these challenges, the overall growth in profitability and strategic successes point to a positive outlook.Highlights
Record Increase in Adjusted OIBDA
Adjusted OIBDA increased by 30% year-over-year to $3.1 billion, driven by significant improvements in the D2C segment and overall financial health.
Paramount+ Subscriber Growth
Paramount+ added 10 million new subscribers in 2024, with 5.6 million added in Q4 alone. Engagement improved, with global watch time per user increasing by 20%.
D2C Profitability Improvement
Direct-to-Consumer segment profitability improved by $1.2 billion for the year, showing a significant reduction in losses and setting up for future profitability.
Successful Franchise Strategy
The Sonic the Hedgehog franchise exceeded $1.2 billion at the global box office, with Sonic 3 becoming the highest-grossing film in the series.
Strong Performance of Original Series
Paramount+ achieved a new high, ranking as the number two domestic SVOD for hours watched across all original series, helped by popular shows like Landman and Lioness.
Positive Free Cash Flow
The company generated $489 million in free cash flow, the highest in four years, signaling strong financial management and operational efficiencies.
Lowlights
Decline in TV Media Revenue
TV Media revenue declined by 4% in Q4, largely due to ongoing challenges in the linear ecosystem affecting affiliate and advertising revenues.
DTC Segment Loss in Q4
Despite improvements over the year, the D2C segment reported a loss of $286 million in Q4 due to content slate seasonality.
Challenges in Affiliate Revenue
The rate of decline in affiliate revenue is expected to increase in Q1 2025, impacted by recent renewals and changes in the pay-TV ecosystem.
Impact of Super Bowl and Political Advertising
Expectations for 2025 include a headwind from the absence of the Super Bowl and political advertising, which significantly benefited 2024 results.
Company Guidance
During Paramount Global's Q4 2024 earnings call, the company provided guidance for the upcoming year, emphasizing a transformative and profitable year with significant improvements in their direct-to-consumer (D2C) segment. Total company adjusted OIBDA grew by 30% year-over-year, reaching $3.1 billion, while free cash flow increased to $489 million, the highest in four years. Paramount+ added 10 million new subscribers in 2024, with a record 5.6 million in Q4, driven by high engagement and a 20% increase in global watch time per user. This led to a 33% rise in revenues, supported by a strong content slate. The company plans to reach full-year domestic profitability for Paramount+ in 2025. Additionally, advertising revenue in the D2C segment increased by 18%, and TV Media licensing revenue grew by 3%. Paramount also highlighted their strategy to leverage content assets, with a focus on sports, franchise films, and original streaming content to drive future growth.Paramount Global Class B Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Paramount Global Adopts Executive Compensation Strategy Amidst Deal
Neutral
Dec 27, 2024
Paramount Global has approved the immediate vesting and settlement of restricted and performance share units for certain executives to mitigate the impact of potential ‘excess parachute payments’ under Section 280G of the Internal Revenue Code. This strategy aims to prevent financial penalties or implications for both the executives and the company in light of their transaction agreement with Skydance Media and New Pluto Global, Inc., enhancing their operational flexibility and securing executive interests.
Executive/Board Changes
Paramount Global Extends EVP Doretha Lea’s Contract
Neutral
Dec 11, 2024
Paramount Global has extended the employment term of Doretha F. Lea, the Executive Vice President of Global Public Policy and Government Relations, until December 31, 2028. As part of the new agreement effective December 5, 2024, her compensation package includes a base salary of $1 million, an increased target annual cash bonus of 110% of her salary, and equity compensation valued at $1.25 million, contingent upon performance goals set by the Board’s Compensation Committee.
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.