Author: cpereira@noblefcm.com

Cumulus Media (CMLS) – Steps Up To The Plate Again

Posted on by cpereira@noblefcm.com


Monday, May 15, 2023

Cumulus Media (NASDAQ: CMLS) is an audio-first media company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. Cumulus Media engages listeners with high-quality local programming through 406 owned-and-operated radio stations across 86 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, CNN, the AP, the Academy of Country Music Awards, and many other world-class partners across more than 9,500 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through the Cumulus Podcast Network, its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. Cumulus Media provides advertisers with personal connections, local impact and national reach through broadcast and on-demand digital, mobile, social, and voice-activated platforms, as well as integrated digital marketing services, powerful influencers, full-service audio solutions, industry-leading research and insights, and live event experiences. Cumulus Media is the only audio media company to provide marketers with local and national advertising performance guarantees. For more information visit www.cumulusmedia.com.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Announces tender offer. On May 12, the company announced that it commenced a modified Dutch auction tender offer to purchase up to $10 million of shares of its Class A common stock. The offer is being made under the company’s previously announced $50 million share repurchase program. The offer begins on May 12, and will expire on June 9, 2023 at 12:00 A.M EST. 

Terms of the Offer. The offer allows shareholders to decide how many shares they are willing to sell at a given price. The price range in the offer is $3.25 to $2.85 per share, and is not conditioned on any minimum amount of shares being tendered. All shares purchased in the offer will be purchased at the same price regardless of tendered price. Additionally, the company reserves the right to change the per share purchase price, and offer an additional 2% of its outstanding Class A common shares without amending or extending the offer. 


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Cocrystal Pharma (COCP) – Products Are Advancing Toward Clinical Milestones

Posted on by cpereira@noblefcm.com


Monday, May 15, 2023

Cocrystal Pharma, Inc. is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses (including SARS-CoV-2), hepatitis C viruses and noroviruses. Cocrystal employs unique structure-based technologies and Nobel Prize-winning expertise to create first- and best-in-class antiviral drugs. For further information about Cocrystal, please visit www.cocrystalpharma.com.

Robert LeBoyer, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Progress Continues In Influenza and COVID-19 Programs. Cocrystal has been using its proprietary structure-based drug discovery and protein engineering technology to develop novel antiviral drugs. Its lead programs in influenza and COVID-19 (the SARS-CoV-2 virus) have reported progress and have new clinical trials ahead in 2023. Other programs are continuing through preclinical development.

Influenza Phase 2a Expected Shortly. Cocrystal has presented preliminary data from its Phase 1 trial for CC-42344 in influenza in December 2022. A Phase 2a trial testing the drug in a human challenge study is expected to begin in 2Q23. This study uses controlled conditions to test efficacy in healthy human volunteers, allowing for a smaller trial with less variance.


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Baudax Bio (BXRX) – 1Q 2023 Reported But It’s All About The Pipeline Progress

Posted on by cpereira@noblefcm.com


Monday, May 15, 2023

Baudax Bio is a pharmaceutical company focused on innovative products for acute care settings. ANJESO is the first and only 24-hour, intravenous (IV) COX-2 preferential non-steroidal anti-inflammatory (NSAID) for the management of moderate to severe pain. In addition to ANJESO, Baudax Bio has a pipeline of other innovative pharmaceutical assets including two novel neuromuscular blocking agents (NMBs) and a proprietary chemical reversal agent specific to these NMBs. For more information, please visit www.baudaxbio.com.

Gregory Aurand, Senior Vice President, Equity Research Analyst, Healthcare Services & Medical Devices, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q 2023 reported.  Last Friday, the Company reported GAAP EPS of  $4.91 per share, as compared to our estimate of $5.75 per share. With the announced asset transfer of ANJESO and write-off of contingent liabilities owed Alkermes, Baudax Bio re-classified the ANJESO operations as discontinued. While showing a net loss operationally, the positive EPS was due to the removal of the Alkermes contingent consideration liability.

Higher expenses in the quarter. The higher than expected expenses consisted primarily of a $2.1 million loss on extinguishment of debt related to the previously disclosed amended credit agreement, and remaining discontinued operation property and equipment write-offs. In addition, continuing operation expenses were $223,000 higher than our estimate, related to higher neuromuscular blocker R&D expenditures.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Alvopetro Energy (ALVOF) – Conference Call Provides Addition Details On Results and Gas Sales Decline

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

Alvopetro Energy Ltd.’s vision is to become a leading independent upstream and midstream operator in Brazil. Our strategy is to unlock the on-shore natural gas potential in the state of Bahia in Brazil, building off the development of our Caburé natural gas field and our strategic midstream infrastructure.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2023-1Q results continued a steady upward production trend and biannual gas price resetting that has lead to higher revenues, fund flow from operations, and earnings. Results were generally in line with expectations. Although gas sales and prices were previously disclosed, total revenues were slightly below expectations due to lower natural gas liquid pricing. Royalty rates fell sharply due to a restructuring and lower natural gas prices.

Sale decline further explained. April volumes averaged 1,972 boepd vs. 2023-1Q production of 2,767 boepd. Management cited reduced demand and higher nominated volumes from its partner in the Cabure unit. Sales in the Cabure field are subject to a partnership agreement based on reserves in the ground. Alvopetro’s partner can then nominate the amount of reserves that are sold from its “piggy bank.” Bahia Gas, the consumer of Alvopetro’s gas supply, can take gas on a firm or interruptible basis. For a 7-10 day period, it took gas primarily from firm customers decreasing the demand for other customers. 


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Tokens.com Corp. (SMURF) – A First Look into the Second Quarter

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

Tokens.com Corp is a publicly traded company that invests in Web3 assets and businesses focused on the Metaverse, NFTs, DeFi, and gaming based digital assets. Tokens.com is the majority owner of Metaverse Group, one of the world’s first virtual real estate companies. Hulk Labs, a wholly-owned Tokens.com subsidiary, focuses on investing in play-to-earn revenue generating gaming tokens and NFTs. Additionally, Tokens.com owns and stakes crypto assets to earn additional tokens. Through its growing digital assets and NFTs, Tokens.com provides public market investors with a simple and secure way to gain exposure to Web3.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Results. Tokens.com reported revenue of $303,217 compared to $326,320 in the prior year. Driven by a $2.6 million digital asset revaluation gain, operating income was $1.9 million compared to a loss of $3.2 million last year. Net income for the quarter was $1.7 million, or diluted EPS of $0.02, compared to $7.8 million, or $0.07. We estimated revenue of $115,000, operating loss of $482,000, and breakeven EPS.

Macro Environment. Tokens.com noted that the ETH Shapella upgrade showed an increase in staking activity, which results in lower yields but is countered with the increase in crypto prices over the last few months. We expect that staking revenue will remain volatile for Tokens.com’s ETH and DOT but will have increases quarter-over-quarter, assuming prices stay level or increase.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

RCI Hospitality Holdings (RICK) – Continuing the Momentum

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

With more than 60 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, Scarlett’s Cabaret, Diamond Cabaret, and PT’s Showclub. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second Quarter Results. RCI reported revenue of $71.5 million, up 12.3% from last year. Net income was $7.7 million, or EPS of $0.83 compared to $11 million, or $1.15, last year due to a legal settlement expense, goodwill impairment, and SG&A expenses. Adjusted EPS was $1.30 versus $1.19. Adjusted EBITDA was at $21.7 million versus $19.9 million last year. We estimated revenue of $71 million, net income of $10.6 million, EPS of $1.15, and adjusted EBITDA of $21.3 million.

A Busy Quarter. The Baby Dolls-Chicas Locas acquisition was completed. The steakhouse and casino project continued to move forward. The Company purchased another Central City property for development of another potential future casino. The San Antonio Bombshells location was purchased and development moved forward on locations in Colorado and Texas. These investments will help drive results going forward.


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Largo Inc. (LGO) – Post conference call thoughts

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE™ and VPURE+™ products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.

Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Quarterly results reviewed. As indicated in an earlier report, first-quarter results were generally in line with expectations. Revenues ran a bit above expectations on favorable pricing, but costs were higher than expected as well. 

Production and sales guidance reductions. Management reduced production and sales guidance by roughly 20% due to drilling delays caused by wet weather. Management explained that vanadium production requires blending, and we believe regular drilling is needed to identify blending supplies. Drilling has resumed, and management should have a better idea what production and sales could look like for the rest of 2024 soon. 


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Motorsport Games (MSGM) – Is There Enough Gas To Get To The Finish Line?

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

Motorsport Games, a Motorsport Network company, combines innovative and engaging video games with exciting esports competitions and content for racing fans and gamers around the globe. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series across PC, PlayStation, Xbox, Nintendo Switch and mobile, including NASCAR, INDYCAR, 24 Hours of Le Mans and the British Touring Car Championship (“BTCC”). Motorsport Games is an award-winning esports partner of choice for 24 Hours of Le Mans, Formula E, BTCC, the FIA World Rallycross Championship and the eNASCAR Heat Pro League, among others.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Q1 results disappoint. The company reported its first quarter results, which were disappointing, but not unexpected. With the lack of current franchise game releases, total company revenues declined 48% to $1.7 million. Given the continued investment in game development, EBITDA loss increased to $4.6 million, well above our $2.2 million loss estimate. 

A tough situation. Management is trying to get to the finish line of launching new franchise motorsport games, which should provide a significant revenue lift and generate positive cash flow. The largest opportunity for that prospect would be in the second quarter 2024 when it launches its new IndyCar game. 


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Direct Digital Holdings (DRCT) – Posted Some Great Digits To Start The Year

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Strong Q1 results. The company reported strong quarterly results. Revenue grew 87% from Q1 22 to $21.2 million, beating our estimate of $17.1 million by 24%. Additionally, Adj. EBITDA of $0.5 million surpassed our estimate of negative $0.2 million. The better than expected results were a product of strength in both Buy-side and Sell-side segments. 

Buy-side excels. The company’s higher margin Buy-side segment reported revenue of $7.4 million, beating our estimate of $6.1 million by 22%. While Buy-side only comprises 35% of revenues, its margins are much higher than Sell-side and contributes to cash flow in a more meaningful way. Management attributed the success of its Buy-side segment to existing clients spending 20% to 30% more, and increasing is client base by 3%. 


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Codere Online (CDRO) – Another Quarter Of Favorable Execution

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

Codere Online refers, collectively, to Codere Online Luxembourg, S.A. and its subsidiaries. Codere Online launched in 2014 as part of the renowned casino operator Codere Group. Codere Online offers online sports betting and online casino through its state-of-the art website and mobile application. Codere currently operates in its core markets of Spain, Italy, Mexico, Colombia, Panama and the City of Buenos Aires (Argentina). Codere Online’s online business is complemented by Codere Group’s physical presence throughout Latin America, forming the foundation of the leading omnichannel gaming and casino presence in the region.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Beats Q1 expectations. The company reported strong Q1 results with net gaming revenue (NGR) of €39.5 million and an adj. EBITDA loss of €2.3 million, compared with our forecast of €33.5 million and a loss of €9.2 million, respectively. The company achieved the favorable results after lowering its marketing spend to streamline its path to profitability.

Performing well in Mexico. Despite lower marketing spend, net gaming revenue (NGR) in Mexico continued to grow in Q1. NGR of €17.6 million was up 75% while the adj. EBITDA loss of €2.0 million, compared with a €7.7 million loss in the prior year period. The strong results in Mexico were driven by a 42% increase in active users and higher spend per active user.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

1·800·Flowers.com, Inc. (FLWS) – Margin Improvement Could Even Accelerate

Posted on by cpereira@noblefcm.com


Friday, May 12, 2023

For more than 45 years, 1-800-Flowers.com has offered truly original floral arrangements, plants and unique gifts to celebrate birthdays, anniversaries, everyday occasions, and seasonal holidays, and to deliver comfort during times of grief. Backed by a caring team obsessed with service, 1-800-Flowers.com provides customers thoughtful ways to express themselves and connect with the most important people in their lives. 1-800-Flowers.com is part of the 1-800-FLOWERS.COM, Inc. family of brands. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Margins improve. The company reported $417.6 million in revenue, 1.9% below our estimate of $425.8 million. But, importantly, adj EBITDA in the quarter was negative $5.5 million, beating our estimate of a loss of $13.1 million by 57.5%.  Improved margins in the quarter were attributed to reduced ocean freight costs and some commodity price decreases.

Raises fiscal 2023 adj. EBITDA guidance. Management provided full year fiscal 2023 guidance of revenue down 8% and adj. EBITDA to be in the range of $85 million to $90 million, an increase from its previous guidance of $75 million to $80 million. In addition, the company reiterated that it will exceed $75 million in free cash flow. 


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

V2X, Inc. (VVX) – A Good Start to the Year

Posted on by cpereira@noblefcm.com


Thursday, May 11, 2023

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

An Excellent Quarter. Driven by outstanding results in the INDOPACOM region, V2X reported excellent results for 1Q23. With the Talisman exercise moving “to the left,” INDOPACOM revenue increased 300% year-over-year and 18% sequentially. Continued expansion on existing programs, contribution from new awards, and successful re-competes, all added to top line growth.

1Q23 Results. Revenue came in at $943.5 million, up 12% y-o-y on a pro forma basis, and exceeded our $830 million estimate. Adjusted EBITDA was $68 million, or a 7.2% margin, compared to our estimate of $54.8 million. Adjusted diluted EPS was $0.80 versus our projection of $0.62.


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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Townsquare Media (TSQ) – Another Industry Leading Performance

Posted on by cpereira@noblefcm.com


Thursday, May 11, 2023

Townsquare is a community-focused digital media and digital marketing solutions company with market leading local radio stations, principally focused outside the top 50 markets in the U.S. Our assets include a subscription digital marketing services business, Townsquare Interactive, providing website design, creation and hosting, search engine optimization, social media and online reputation management as well as other digital monthly services for approximately 26,800 SMBs; a robust digital advertising division, Townsquare IGNITE, a powerful combination of a) an owned and operated portfolio of more than 330 local news and entertainment websites and mobile apps along with a network of leading national music and entertainment brands, collecting valuable first party data, and b) a proprietary digital programmatic advertising technology stack with an in-house demand and data management platform; and a portfolio of 321 local terrestrial radio stations in 67 U.S. markets strategically situated outside the Top 50 markets in the United States. Our portfolio includes local media brands such as WYRK.com, WJON.com, and NJ101.5.com and premier national music brands such as XXLmag.com, TasteofCountry.com, UltimateClassicRock.com and Loudwire.com.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Beats Q1 estimates. The company reported another industry leading performance in the first quarter with revenues up 2.9% to $103.1 million, beating our $100.9 million estimate. We estimate that industry revenues likely will be down in the range of 3% to 5%. First quarter adj. EBITDA was $19.4 million, which beat our $17.9 million estimate.  

Digital surpasses 50% of revenue. Digital revenue grew 8% in the quarter, accounting for 54% of total revenue. Impressively, Digital contributed 63% of total operating profit. The Digital revenue growth was fueled by the company’s Digital Advertising solutions business, which was up 15%, making up for the slight decline in Townsquare Interactive revenue. 


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