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Corus Entertainment (TSE:CJR.B)
TSX:CJR.B
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Corus Entertainment
(TSX:CJR.B)
51Neutral
Positive Factors
Cash Flow
Despite challenges, free cash flow rose significantly due to positive working capital flows.
Negative Factors
Debt and Leverage
With balance sheet leverage at 4.48x net debt/LTM EBITDA, there is little prospect for a positive valuation for the equity.
Financial Performance
Revenues and EBITDA continue to be weak, highlighted by declining TV advertising and an easing margin profile as TV programming costs started to rebound.
Corus Entertainment (CJR.B) vs. S&P 500 (SPY)
Market Cap
$24.93M
Dividend YieldN/A
Average Volume (3M)240.74K
Price to Earnings (P/E)―
Beta (1Y)1.77
Revenue Growth-15.32%
EPS Growth-85.65%
CountryCA
Employees2,610
SectorCommunication Services
Sector Strength73
IndustryTraditional Media
Share Statistics
EPS (TTM)-3.98
Shares Outstanding196,074,770
10 Day Avg. Volume425,108
30 Day Avg. Volume240,741
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.02
Price to Cash Flow (P/CF)-0.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$0.20Price Target Upside64.05% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Corus Entertainment Business Overview & Revenue Model
Company DescriptionCorus Entertainment, Inc. is a media and entertainment holding company, which engages in the provision of radio broadcasting, specialty television, digital audio services, and cable advertising services. It operates through the following segments: Television, Radio, and Corporate. The Television segment comprises of specialty television networks, pay television services, conventional television stations, and the Corus content business. The Radio segment includes radio stations with a concentration in the densely populated area. The Corporate segment refers to the incremental cost of corporate overhead in excess of the amount allocated to the other operating segments. The company was founded by James Robert Shaw on March 3, 1998 and is headquartered in Toronto, Canada.
How the Company Makes MoneyCorus Entertainment generates revenue primarily through advertising sales, subscriber fees, and content licensing. Advertising sales come from the company's television and radio segments, where businesses pay to broadcast their advertisements to Corus's audience. Subscriber fees are collected from cable and satellite providers for access to Corus's specialty television channels. Additionally, Corus earns money from the licensing and distribution of its content to other broadcasters and platforms, both domestically and internationally. Key partnerships with content creators and distributors also contribute to its revenue streams, enhancing its scope and reach in the media industry.
Corus Entertainment Financial Statement Overview
Summary
Corus Entertainment is facing significant financial challenges, with declining revenues and negative profitability impacting its financial health. High leverage and negative equity position pose risks to its solvency, while cash flows provide some stability amidst these challenges. Strategic restructuring and cost management are crucial to improving financial resilience.Income Statement
Corus Entertainment shows a declining revenue trend in recent years with a substantial decrease from $1.6B in 2022 to $1.23B TTM. Gross profit margin for TTM stands at 56.5%, but there is a concerning negative net profit margin of -64.6%. EBIT and EBITDA margins are weak, at 5.1% and -22.5% respectively, indicating operational inefficiencies and significant non-operational expenses.45
Neutral
Balance Sheet
The company exhibits a highly leveraged position with a negative stockholders' equity, leading to an unsustainable debt-to-equity ratio. Total liabilities exceed total assets, highlighting potential liquidity issues. The return on equity is not meaningful due to negative equity, and the equity ratio stands at -29.1%, which is concerning.30
Negative
Cash Flow
Operating cash flow remains positive, although declining, at $88.88M TTM. Free cash flow to net income ratio is not meaningful due to negative net income. However, free cash flow has been maintained positively, providing some cushion against cash outflows. The operating cash flow to net income ratio is negative, indicating cash flow challenges.65
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.23B | 1.27B | 1.51B | 1.60B | 1.54B | 1.51B | Gross Profit |
| 694.02M | 629.42M | 839.33M | 971.36M | 1.00B | 965.86M | EBIT |
| 62.30M | 172.35M | 186.18M | 289.19M | 375.50M | 351.12M | EBITDA |
| -275.88M | -236.59M | 401.30M | 655.86M | 1.03B | 230.23M | Net Income Common Stockholders |
| -793.44M | -772.64M | -428.72M | -232.24M | 172.55M | -607.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 87.60M | 82.42M | 56.16M | 54.91M | 43.69M | 45.90M | Total Assets |
| 1.55B | 1.49B | 2.75B | 3.50B | 3.86B | 3.97B | Total Debt |
| 1.08B | 1.17B | 1.22B | 1.40B | 1.49B | 1.66B | Net Debt |
| 991.74M | 1.09B | 1.16B | 1.34B | 1.45B | 1.61B | Total Liabilities |
| 1.87B | 1.83B | 2.29B | 2.60B | 2.64B | 2.92B | Stockholders Equity |
| -451.32M | -465.40M | 317.75M | 752.04M | 1.07B | 899.82M |
| Cash Flow | Free Cash Flow | ||||
| 68.95M | 111.53M | 106.03M | 194.62M | 244.65M | 293.95M | Operating Cash Flow |
| 88.88M | 130.66M | 122.67M | 216.84M | 274.49M | 313.27M | Investing Cash Flow |
| -21.28M | -29.55M | 125.27M | 25.17M | -29.53M | -19.00M | Financing Cash Flow |
| -45.23M | -73.64M | -246.69M | -230.78M | -247.18M | -330.94M |
Corus Entertainment Technical Analysis
Positive
0.12
Price Trends
0.10
Positive
0.10
Positive
0.12
Positive
Market Momentum
<0.01
Negative
71.92
Negative
73.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CJR.B, the sentiment is Positive. The current price of 0.12 is above the 20-day moving average (MA) of 0.11, above the 50-day MA of 0.10, and below the 200-day MA of 0.12, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 71.92 is Negative, neither overbought nor oversold. The STOCH value of 73.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CJR.B.
Corus Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | C$576.35M | 6.31 | 10.29% | 5.94% | -0.16% | 133.49% | |
64 Neutral | C$590.20M | ― | -6.14% | 3.68% | 9.94% | -147.16% | |
58 Neutral | $25.21B | 3.07 | -13.86% | 4.29% | 2.47% | -43.03% | |
51 Neutral | $24.93M | ― | 175.81% | ― | -15.32% | -85.65% |
* Communication Services Sector Average
Performance Comparison
TSE:CJR.B
Corus Entertainment
0.13
-0.59
-82.52%
BCE
BCE
22.71
-6.96
-23.46%
RCI
Rogers Communication
25.82
-12.26
-32.20%
TSE:CGO
Cogeco Inc. SV
59.77
8.51
16.60%
TSE:RAY.A
Stingray Digit SV
8.15
0.45
5.84%
QBCRF
Quebecor
26.15
5.07
24.05%
Corus Entertainment Earnings Call Summary
Earnings Call Date: Jan 10, 2025 | % Change Since: 14.29% | Next Earnings Date: Apr 11, 2025
Earnings Call Sentiment Neutral
Corus Entertainment's earnings call presented a mixed picture. While the company has successfully launched new lifestyle brands and seen growth in streaming and news audiences, it faces challenges with declining advertising revenue, increased debt levels, and a competitive advertising market. Cost reduction initiatives are in place, but financial metrics have deteriorated.Highlights
Successful Launch of New Lifestyle Brands
Corus launched new lifestyle brands 'Flavor Network' and 'Home Network', supported by a two-month free preview across major distributors and strong advertiser interest. Ratings remained consistent, and all carriage for the networks was maintained.
Strong Fall Season Performance
Global TV network ranked number one in core prime time in Canada with six of the top 10 and 11 of the top 20 shows, including 'Survivor' and 'Saturday Night Live'.
Growth in Streaming and News Audience
Total hours streamed increased by 24% year-over-year, with STACKTV, Pluto TV, and Global TV App contributing to the growth. News audiences grew 8% on linear TV and 31% on GlobalNews.ca.
Cost Reduction Initiatives
Significant headcount reduction led to a 14% decrease in employee costs. Overall expense reductions were $6 million in the quarter.
Record Streaming Subscribers
As of the end of Q1, Corus had a record high number of paying streaming subscribers.
Lowlights
Decline in Television Advertising Revenue
Television advertising revenue dropped by 16% in Q1, driven by industry-wide advertising trends and increased digital competition.
Financial Metrics Deterioration
Consolidated revenue decreased by 12% to $327 million, with a 29% drop in TV segment profit. Segment profit margins fell from 31% to 26%. Free cash flow was negative $10 million.
Increased Debt Levels
Net debt to segment profit ratio increased to 4.48 times from 3.84 times in August 2024, partly due to lower segment profit.
Challenges Due to Oversupply in Advertising
The advertising market faced challenges due to an oversupply of premium digital video inventory, leading to increased competition and pressure on advertising rates.
Subscription Revenue Decline
Subscriber revenue decreased by 2%, reflecting declines in the traditional distribution system.
Company Guidance
During the Corus Entertainment First Quarter 2025 Analyst and Investor Conference Call, guidance was provided on several key metrics. The company reported a consolidated revenue of $327 million, reflecting a 12% decrease from the previous year, with a consolidated segment profit of $84 million, resulting in a profit margin of 26% compared to 31% last year. The TV advertising revenue experienced a decline of 16%, while subscriber revenue decreased by 2%. The radio segment also saw a 14% decline in revenue. Free cash flow was negative $10 million, influenced by higher restructuring costs and seasonal working capital usage. The company ended the quarter with $88 million in cash and cash equivalents, while net debt to segment profit was 4.48 times. Looking ahead, Corus anticipates continued advertising revenue challenges and expects a low double-digit percentage increase in TV program rights amortization for Q2, alongside a 5% to 10% decrease in G&A expenses.Corus Entertainment Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Corus Entertainment Strengthens Financial Position with Amended Credit Agreement
Positive
Mar 21, 2025
Corus Entertainment Inc. has successfully amended its credit agreement, extending the maturity date to March 20, 2027, and increasing its revolving credit limit to $75 million. This strategic move, supported by key debt investors, aims to enhance the company’s financial sustainability and adaptability in the face of ongoing industry changes.
Corus Entertainment Announces Shareholder Meeting Results
Jan 17, 2025
Corus Entertainment Inc. announced the results of its Annual General Meeting of Shareholders, where a significant majority of Class A Voting Shares were cast. All proposed matters, including the election of directors and appointment of auditors, were approved by shareholders. This indicates strong shareholder support and stability in Corus’s governance structure, which may positively influence its strategic direction and stakeholder confidence.
Corus Entertainment Sees Audience Growth Amid Revenue Decline in Q1 2025
Jan 10, 2025
Corus Entertainment reported a 12% decline in consolidated revenue and a 30% decrease in segment profit for the first quarter of fiscal 2025. Despite these financial challenges, the company experienced growth in linear viewing and digital audiences, supported by a robust fall programming schedule. Co-CEOs Troy Reeb and John Gossling remain optimistic about future audience trends with upcoming winter programming and successful new lifestyle brands. However, they emphasize the need for cost reductions and enhanced focus on high-margin assets to strengthen the company’s financial position amidst industry and economic pressures.
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.