We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Industry Outlook Highlights Liberty Media and Reservoir Media
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 16, 2022 – Today, Zacks Equity Research discusses Liberty Media (FWONK - Free Report) and Reservoir Media (RSVR - Free Report) .
The Zacks Media Conglomerates industry has been benefiting from the change in consumer preference for over-the-top (OTT) content. Companies like Liberty Media and Reservoir Media are investing heavily to develop original and fresh content, including music and shows, to attract and retain subscribers. The availability of a variety of alternative packages, including skinny bundles, which are delivered at lower costs than traditional offerings to attract consumers, is aiding the industry players’ prospects. However, media companies have been affected by the decline in ratings for broadcast television, as well as reduced demand for home entertainment sales of theatrical content. Sluggish spending by advertisers due to raging inflation and a higher interest rate has been another concern.
Industry Description
The Zacks Media Conglomerates industry primarily comprises companies that develop and distribute shows, movies, music, educational content, and digital learning services. The companies offer entertainment, travel and consumer products. The media companies are riding on shifting consumer preference for OTT content, be it subscription-based video on demand or advertising supported. Advertising is a significant revenue source for media industry participants. Metaverse is a budding market for media companies. Moreover, subscription prices have room for growth due to expanding subscriber base. However, media industry participants are suffering from the industry-wide decline in ratings for broadcast television, reduced demand for home entertainment sales of theatrical content, and increasing cord-cutting.
3 Trends Shaping the Future of the Media Industry
Original Content Driving Growth: Media companies’ ability to generate ad revenues outside traditional TV platforms, such as websites and any digitally-consumed platform, provides increased scope for target-based advertising. The growing consumer preference for subscription services instead of linear pay-TV and rental or outright purchase has compelled the industry players to alter their business models. Media companies are innovating in terms of original content to attract subscribers.
High-Speed Internet Demand Acting as the Key Catalyst: The growing demand for high-speed Internet, including broadband, has aided the media industry participants. Improving Internet speed is fueling the demand for high-quality videos and the trend of binge-watching. Further, a strengthening broadband ecosystem in international markets, along with the proliferation of smart TVs, is anticipated to drive growth.
Cord Cutting and Matured PayTV Industry Hurting Prospects: The media television industry is witnessing the rapid evolution of distribution platforms, and embracing new players and advanced technologies. The declining profitability of residential video services due to rising programming costs and retransmission fees has made survival difficult for traditional companies. Additionally, the heightened need for on-demand content has led to the mushrooming of streaming service providers, making it tricky for traditional media television companies to maintain their viewer bases.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Media Conglomerates industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #49, which places it in the top 19% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector, Lags S&P 500
The Zacks Media Conglomerates industry has outperformed the broader Zacks Consumer Discretionary sector but lagged the S&P 500 composite over the past year.
The industry has declined 36% over the above-mentioned period compared with the broader sector’s dip of 39.5%. The S&P 500 has climbed 16.7% during the same time frame.
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing media companies, we see that the industry is currently trading at 5.92X compared with the S&P 500’s 12.09X and the sector’s 8.22X.
Over the past five years, the industry has traded as high as 16.26X, as low as 5.23X and at the median of 7.82X.
2 Media Stocks to Buy Right Now
Liberty: The Englewood, CO-based holding company has interests in the media and entertainment industries, including motorsports, through its wholly-owned subsidiary Formula 1. Liberty’s other consolidated subsidiaries are Sirius XM Holdings and Live Nation Entertainment.
Shares of this Zacks Rank #1 (Strong Buy) company have lost 1.4% in the past year. The Zacks Consensus Mark for FWONK’s ongoing-year earnings has jumped 143% to 85 cents per share in 30 days’ time. You can see the complete list of today’s Zacks #1 Rank stocks here.
Reservoir: This New York-based leading independent music company currently sports a Zacks Rank #1. Reservoir benefits from its strong content portfolio. Its publishing catalog includes historic compositions written and performed by greats like Joni Mitchell, The Isley Brothers, Billy Strayhorn, Hoagy Carmichael and John Denver.
Reservoir shares have declined 38.5% in the past year. The consensus mark for RSVR's fiscal 2023 earnings has moved up a penny to 15 cents per share in the past 30 days.
Why Haven’t You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks Industry Outlook Highlights Liberty Media and Reservoir Media
For Immediate Release
Chicago, IL – November 16, 2022 – Today, Zacks Equity Research discusses Liberty Media (FWONK - Free Report) and Reservoir Media (RSVR - Free Report) .
Industry: Media Conglomerates
Link: https://www.zacks.com/commentary/2018337/2-media-stocks-to-buy-from-a-prospering-industry
The Zacks Media Conglomerates industry has been benefiting from the change in consumer preference for over-the-top (OTT) content. Companies like Liberty Media and Reservoir Media are investing heavily to develop original and fresh content, including music and shows, to attract and retain subscribers. The availability of a variety of alternative packages, including skinny bundles, which are delivered at lower costs than traditional offerings to attract consumers, is aiding the industry players’ prospects. However, media companies have been affected by the decline in ratings for broadcast television, as well as reduced demand for home entertainment sales of theatrical content. Sluggish spending by advertisers due to raging inflation and a higher interest rate has been another concern.
Industry Description
The Zacks Media Conglomerates industry primarily comprises companies that develop and distribute shows, movies, music, educational content, and digital learning services. The companies offer entertainment, travel and consumer products. The media companies are riding on shifting consumer preference for OTT content, be it subscription-based video on demand or advertising supported. Advertising is a significant revenue source for media industry participants. Metaverse is a budding market for media companies. Moreover, subscription prices have room for growth due to expanding subscriber base. However, media industry participants are suffering from the industry-wide decline in ratings for broadcast television, reduced demand for home entertainment sales of theatrical content, and increasing cord-cutting.
3 Trends Shaping the Future of the Media Industry
Original Content Driving Growth: Media companies’ ability to generate ad revenues outside traditional TV platforms, such as websites and any digitally-consumed platform, provides increased scope for target-based advertising. The growing consumer preference for subscription services instead of linear pay-TV and rental or outright purchase has compelled the industry players to alter their business models. Media companies are innovating in terms of original content to attract subscribers.
High-Speed Internet Demand Acting as the Key Catalyst: The growing demand for high-speed Internet, including broadband, has aided the media industry participants. Improving Internet speed is fueling the demand for high-quality videos and the trend of binge-watching. Further, a strengthening broadband ecosystem in international markets, along with the proliferation of smart TVs, is anticipated to drive growth.
Cord Cutting and Matured PayTV Industry Hurting Prospects: The media television industry is witnessing the rapid evolution of distribution platforms, and embracing new players and advanced technologies. The declining profitability of residential video services due to rising programming costs and retransmission fees has made survival difficult for traditional companies. Additionally, the heightened need for on-demand content has led to the mushrooming of streaming service providers, making it tricky for traditional media television companies to maintain their viewer bases.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Media Conglomerates industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #49, which places it in the top 19% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector, Lags S&P 500
The Zacks Media Conglomerates industry has outperformed the broader Zacks Consumer Discretionary sector but lagged the S&P 500 composite over the past year.
The industry has declined 36% over the above-mentioned period compared with the broader sector’s dip of 39.5%. The S&P 500 has climbed 16.7% during the same time frame.
Industry's Current Valuation
On the basis of the trailing 12-month EV/EBITDA, a commonly used multiple for valuing media companies, we see that the industry is currently trading at 5.92X compared with the S&P 500’s 12.09X and the sector’s 8.22X.
Over the past five years, the industry has traded as high as 16.26X, as low as 5.23X and at the median of 7.82X.
2 Media Stocks to Buy Right Now
Liberty: The Englewood, CO-based holding company has interests in the media and entertainment industries, including motorsports, through its wholly-owned subsidiary Formula 1. Liberty’s other consolidated subsidiaries are Sirius XM Holdings and Live Nation Entertainment.
Shares of this Zacks Rank #1 (Strong Buy) company have lost 1.4% in the past year. The Zacks Consensus Mark for FWONK’s ongoing-year earnings has jumped 143% to 85 cents per share in 30 days’ time. You can see the complete list of today’s Zacks #1 Rank stocks here.
Reservoir: This New York-based leading independent music company currently sports a Zacks Rank #1. Reservoir benefits from its strong content portfolio. Its publishing catalog includes historic compositions written and performed by greats like Joni Mitchell, The Isley Brothers, Billy Strayhorn, Hoagy Carmichael and John Denver.
Reservoir shares have declined 38.5% in the past year. The consensus mark for RSVR's fiscal 2023 earnings has moved up a penny to 15 cents per share in the past 30 days.
Why Haven’t You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.