My first post, please not too much hate. ViacomCBS is my second largest trade and should be added to. So the opinion should also be questioned.
What is ViacomCBS's business model? ViacomCBS is a media conglomerate, formed by the merger of Viacom with CBS Corporation. Revenues are generated by television channels (CBS), cable networks (Showtime, MTV, Nickelodeon, etc.), television studios (Paramount Pictures) and streaming services (Paramount+, PlutoTV).
Briefly about the key figures:
Market Cap: ~19 billion
P/E RATIO: 7
KUV: 0.67
Dividend yield: 3.43
P/E and KUV are well below historical average, dividend yield is well above. So, in my opinion, the stock is undervalued even without the growth opportunities.
Why is the stock so cheap? Price performance looks like shit, in my opinion aftermath of the Archegos debacle.
What are the growth opportunities? While the TV and Cable Networks segments are running sideways, the Streaming segment is growing strongly. In Q3 2021, revenue in the Streaming YoY segment grew 62%. Streaming subscription revenues even grew by 79%. The important thing to understand here is that ViacomCBS' streaming offerings are still fairly new and have not yet fully exploited existing markets (which can be seen in the growth numbers) and are not yet available even in core markets like Europe. Paramount+ will be launched in many countries in Europe, including Germany, in 2022.
What's my bottom line? We have here a very cheap stock by any standards (P/E 7 with a dividend yield of 3.43%). The group is well diversified in the media space and has strong growth opportunities in streaming, which can/will grow 40/50% in each of 2022/2023, as evidenced by growth to date and entry into new markets such as Europe.
There is, due to the valuation and the secure dividend almost no downside anymore, but if the streaming area continues to grow well and the stock is valued only close to the peer group, there is enormous potential. In addition, ViacomCBS is also a good takeover candidate, which also offers enormous potential for shareholders.
