Cinedigm Corp. engages in the marketing and distribution of movie, television, and other short form content managing a library of distribution rights. The company is headquartered in New York City, New York.
Business Growth In The Last Fiscal Year
Cinedigm Corp does not report a significant amount of sales growth, which is not useful.With that, money managers will appreciate CIDM’s gross profit ratio of 56%.Last year, the company showed sales of $39.291 million.
CIDM does not report large EBITDA growth.But, the company’s EBITDA ratio is positive and equal to 5%.I feel that when more investors get to know the financial statistics of CIDM, the stock demand will increase.The EBITDA growth is negative because the cost of sales increased a 6%.
Regarding the share count, investors will not like that the shares outstanding increased a 16%.To sum up, the intrinsic valuation of each share declined.
With an asset/liability ratio of more than 1x, CIDM’s balance sheet looks stable.In Q3, the total amount of assets was equal to $91 million, with total liabilities of $80 million.CIDM reports $26 million in cash and cash equivalents.I believe that the company has a good amount of cash to conduct additional R&D and increase its marketing efforts.The balance sheet shows deferred revenue of $1 million, which I appreciate.Deferred revenue represents a prepayment by the company’s clients that have yet to be delivered.Summarising, the company receives cash in advance of it being earned.
CIDM’s short term debt is less significant than the company’s cash and cash equivalents.In my view, Cinedigm Corp may not have to worry about any liquidity risk.I feel that CIDM is cheap.CIDM’s debt to equity ratio is below 2x.Summarising, the debt level is under control.Notice that Cinedigm Corp reports cash and cash equivalents of $26 million, and net debt of $-1 million.
In Q3 CIDM reported quarterly sales of $9 million, and gross profit of $5 million.The gross profit ratio was equal to 55%.I think that considering the quality of the business, I see room for CIDM to grow into its valuation over time.
Valuation and Risks
I appreciate quite a bit the company because it reports EV/Free Cash Flow of 8.As for me, I think that other value investors will love the company’s ability to produce cash flow.CIDM’s EV/Operating Cash Flow is equal to 7x.I cannot really understand why the company trades cheap.CIDM trades at 25x EBITDA, which may not seem cheap.However, with the company’s EBITDA margin of 5% the EV/EBITDA ratio makes sense.null
Cinedigm Corp has a market capitalization of $250 million.The enterprise value is equal to $57 million.With forward sales of $39 million, CIDM sells at less than 1x forward sales.I feel that shareholders will most likely believe that the company is cheap.
The company shows a beta of 1.83276.It is more large than 1, which means that the stock price can show substantial volatility.CIDM’s stock price volatility is larger than that of the market.To sum up, if you are not a volatility expert don’t trade Cinedigm Corp.
The following CIDM’s insiders acquired or sold equity recently.CIDM’s traders will most likely study this information:
+In 2020-12-31, director, 10 percent owner Xu Peixin sold equity of CIDM.
+In 2020-12-30, director, 10 percent owner Xu Peixin sold stock of CIDM.
+In 2020-12-28, director, 10 percent owner Xu Peixin sold equity of CIDM.
If you see an error, please contact the editor. We don’t own CIDM’s shares, and this is our opinion. We do not offer a recommendation to buy or sell any stock.