Bowlero (BOWL) – Rolled Another Solid Quarter


Tuesday, February 06, 2024

Bowlero Corp. is the worldwide leader in bowling entertainment, media, and events. With more than 300 bowling centers across North America, Bowlero Corp. serves more than 26 million guests each year through a family of brands that includes Bowlero, Bowlmor Lanes, and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.

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.

Solid Q2 results. The company reported Q2 revenue of $305.7 million, beating our estimate of $295.5 million by 3.4%.. Adj. EBITDA of $103.1 million was 3.6% higher than our estimate of $99.5 million. Notably, acquisitions and new builds contributed $41 million of revenue in the quarter and event revenue was up over 30% from the prior year period.

Expanding growth initiatives. Management highlighted the company’s increased investment guidance for 2024. Notably, $190.0 million is allocated for acquisitions, up from $160.0 million, and $80.0 million is allocated to conversions, up from $75.0 million. Additionally, $40.0 million is allocated to new builds and $45.0 million in maintenance expenditures are expected in 2024. We view the company’s increased investment favorably.


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Release – Varsha Tomar and Luke Kenny Join Harte Hanks in Senior Sales Roles

Research News and Market Data on HHS

CHELMSFORD, MA / ACCESSWIRE / February 5, 2024 / Harte Hanks, Inc. (NASDAQ:HHS), a leading global customer experience company focused on bringing companies closer to customers for 100 years, today announced the appointment of two senior executives to newly-created roles reporting to Kelly Waller, Senior Vice President of Sales and Marketing.

Varsha Tomar was named Vice President, Partnerships, and will oversee the identification, cultivation, and management of strategic B2B sales partnerships that will enable Harte Hanks to drive incremental revenue. She will oversee joint alliances, resellers/white labelers of Harte Hanks services and manage a team of Inside Partner Account Managers. Ms. Tomar joins Harte Hanks from HealthEquity, where she was Director of Business Operations after previously serving as Global Head of Go-To-Market Strategy for Finastra.

Luke Kenny was named Sr. Director of International Sales and Client Expansion. Based in Portugal, Mr. Kenny has nearly two decades of experience as a sales director and demand generation expert across EMEA and APAC for B2B organizations, including Finastra and FIS. At Harte Hanks, he will focus on sales as well as supporting and growing business from existing European clients. He is also tasked with overseeing the growth of the sales teams throughout the region. Harte Hanks has offices in the UK, Romania and Belgium.

“As we continue to implement our transformation growth plan, these two strategic hires will help us meet our goals of expanding our sales and marketing organization routes to market and expanding our global footprint,” commented Ms. Waller.

About Harte Hanks:

Harte Hanks (NASDAQ:HHS) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract and engage their customers.

Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands, including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony and IBM among others. Headquartered in Chelmsford, Massachusetts, Harte Hanks has over 2,500 employees in offices across the Americas, Europe, and Asia Pacific.

For more information, visit hartehanks.com.

As used herein, “Harte Hanks” or “the Company” refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks’ logo and name are trademarks of Harte Hanks.

Cautionary Note Regarding Forward-Looking Statements:

Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward- looking statements. Such forward-looking statements concern management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by the management of the Company. These statements are not guarantees of future performance and actual events or results may differ significantly from these statements. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. It is advisable, however, to consult any further disclosures the Company makes in its filings with the Securities and Exchange Commission, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (if any). These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.

For media inquiries or further information, please contact: Jen.London@hartehanks.com

SOURCE: Harte Hanks, Inc.

Release – Harte Hanks Strengthens Senior Leadership Team

Research News and Market Data on HHS

January 29, 2024 8:00 AM

David Garrison named permanent Chief Financial Officer
David Fisher Named Chief Transformation Officer

Harte Hanks, Inc. (NASDAQ: HHS), a leading global customer experience company focused on bringing companies closer to customers for 100 years, today announced that David Garrison, an experienced finance executive with more than 20 years of public company CFO experience currently serving as Interim Chief Financial Officer, has been named as Harte Hanks’ permanent Chief Financial Officer effective January 29, 2024. In addition, David Fisher, an accomplished executive with over 25 years of experience focused on strategic initiatives, cost structure transformation, financial planning and analysis, has been named Chief Transformation Officer.

Garrison, who joined Harte Hanks in an interim capacity in October, 2023, brings notable expertise in cost containment, streamlining operations, and ERP implementations. He joins Harte Hanks from Digital Lumens Incorporated, an IoT lighting fixture and factory automation technology company that was spun out of Osram Sylvania, where he served as CFO for the last two years. As part of this role, he was instrumental in selling a product line to a strategic buyer and selling the remaining operating entity to a foreign company. Previously, he spent three years as Chief Financial Officer for Sensera, Inc., an Australian listed medical and IoT technology company, where he played an important role in turning around operations to facilitate a sale. Previously, he served as Managing Director of IW Ventures LLC, a financial consultant, and TTcogen LLC, a joint venture between Tecogen Inc. and Tedom a.s. From 2014 to 2017, Garrison served as CFO of Tecogen Inc., a NASDAQ-listed company that designs, manufactures and sells industrial and commercial cogeneration systems, where he supported growth with cost controls to drive margin expansion and profitability. He has an MBA from Boston University and has led several Greater Boston-based companies through successful growth-driven integrations, transactions, and implementations.

Fisher has been consulting for Harte Hanks since March of 2023, most recently leading the Company’s engagement with the Kearney organization. He will now lead the execution of Project Elevate, Harte Hanks’ transformation and modernization initiative. He brings expertise in strategic initiatives, cost transformation, financial planning & analysis, accounting, strategic sourcing, procurement and risk management. He joined Harte Hanks from Tribune Publishing, where he served as Senior Vice President and Chief Procurement Officer. Previously, he was SVP of Corporate Finance & Planning, and VP of Corporate Development at Tribune. Before that, he served as SVP of Finance for Source Interlink, and was an Assurance Manager for BDO USA, LLP. He has a Bachelor’s Degree in accounting/business management from the Wisconsin School of Business and is a Certified Public Accountant (CPA).

“We continue to enhance our senior leadership team with modern skillsets to advance our ‘Project Elevate’ initiative. We are well underway on an end-to-end transformation of our business,” said Kirk Davis, Chief Executive Officer . “David Garrison has proven his value in a short period of time, advancing our ERP and cost containment efforts while advancing digital initiatives to streamline processes and modernize our business.

“David Fisher and I have enjoyed prior success in working with the Kearney organization. We have accelerated our transformation commitment and see compelling growth and optimization opportunities ahead as we execute our plan. I’m heartened by our entire senior team’s commitment to becoming a more profitable and growth-focused organization. These two appointments, in conjunction with the recent appointment of Kelly Waller as our new SVP, Sales and Marketing, and other senior team members, have us well positioned for 2024.”

About Harte Hanks:

Harte Hanks (NASDAQ: HHS ) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract and engage their customers.

Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands, including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony and IBM among others. Headquartered in Chelmsford, Massachusetts, Harte Hanks has over 2,500 employees in offices across the Americas, Europe, and Asia Pacific.

For more information, visit hartehanks.com

As used herein, “Harte Hanks” or “the Company” refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks’ logo and name are trademarks of Harte Hanks.

Cautionary Note Regarding Forward-Looking Statements:

Our press release and related earnings conference call contain “forward-looking statements” within the meaning of U.S. federal securities laws. All such statements are qualified by this cautionary note, provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements other than historical facts are forward-looking and may be identified by words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “seeks,” “could,” “intends,” or words of similar meaning. These forward-looking statements are based on current information, expectations and estimates and involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from what is expressed in or indicated by the forward-looking statements. In that event, our business, financial condition, results of operations or liquidity could be materially adversely affected and investors in our securities could lose part or all of their investments. These risks, uncertainties, assumptions and other factors include: (a) local, national and international economic and business conditions, including (i) the outbreak of diseases, such as the COVID-19 coronavirus, which has curtailed travel to and from certain countries and geographic regions, created supply chain disruption and shortages, disrupted business operations and reduced consumer spending, (ii) market conditions that may adversely impact marketing expenditures, (iii) the impact of the Russia/Ukraine conflict on the global economy and our business, including impacts from related sanctions and export controls and (iv) the impact of economic environments and competitive pressures on the financial condition, marketing expenditures and activities of our clients and prospects; (b) the demand for our products and services by clients and prospective clients, including (i) the willingness of existing clients to maintain or increase their spending on products and services that are or remain profitable for us, and (ii) our ability to predict changes in client needs and preferences; (c) economic and other business factors that impact the industry verticals we serve, including competition and consolidation of current and prospective clients, vendors and partners in these verticals; (d) our ability to manage and timely adjust our facilities, capacity, workforce and cost structure to effectively serve our clients; (e) our ability to improve our processes and to provide new products and services in a timely and cost-effective manner though development, license, partnership or acquisition; (f) our ability to protect our facilities against security breaches and other interruptions and to protect sensitive personal information of our clients and their customers; (g) our ability to respond to increasing concern, regulation and legal action over consumer privacy issues, including changing requirements for collection, processing and use of information; (h) the impact of privacy and other regulations, including restrictions on unsolicited marketing communications and other consumer protection laws; (i) fluctuations in fuel prices, paper prices, postal rates and postal delivery schedules; (j) the number of shares, if any, that we may repurchase in connection with our repurchase program; (k) unanticipated developments regarding litigation or other contingent liabilities; (l) our ability to complete anticipated divestitures and reorganizations, including cost-saving initiatives; (m) our ability to realize the expected tax refunds; and (n) other factors discussed from time to time in our filings with the Securities and Exchange Commission, including under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 which was filed on March 31, 2023. The forward-looking statements in this press release and our related earnings conference call are made only as of the date hereof, and we undertake no obligation to update publicly any forward-looking statement, even if new information becomes available or other events occur in the future.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240129195380/en/

Investor Relations Contact:
Rob Fink or Tom Baumann
646.809.4048 / 646.349.6641
FNK IR
HHS@fnkir.com

Release – Xcel Brands Co-Founds ORME, A Next Generation Short-Form Video Marketplace

Research News and Market Data on XELB

January 24, 2024 at 5:00 PM EST

Xcel Brands owns 30% of ORME

ORME was created to reward customers for interacting with brands and retailers

NEW YORK, Jan. 24, 2024 (GLOBE NEWSWIRE) — Xcel Brands, Inc. (NASDAQ: XELB) (“Xcel” or the “Company”), a media and consumer products company with expertise in livestream shopping and social commerce, today announced its 30% investment in ORME, a groundbreaking short-form video (SFV) marketplace designed to revolutionize social commerce.

“ORME is an opportunity with unicorn potential,” said Robert W. D’Loren, Chairman and Chief Executive Officer of Xcel. “ORME is redefining how consumers interact with brands and products, creating a seamless and engaging shopping experience that provides a nearly infinite return on ad spend for brands and gives all shoppers an opportunity to participate in the retail commerce flywheel.”

Faisal Ahmed, CEO of ORME, Inc., highlighted, “ORME is more than a marketplace; it is a community where social sharing and referral incentives include and reward shoppers and influencers. This feature not only amplifies brand content but also offers fee earning potential through referrals, leveraging the power of social networks and word-of-mouth marketing.”

ORME is set to transform the retail model from a one-to-many to a many-to-many experience. Combining the best aspects of affiliate, influencer, and digital marketing into a performance-based model, ORME presents a whole new experience for shoppers, influencers, brands, and retailers.

For shoppers and influencers, ORME creates a unique environment where they can create fun content, tell inspiring stories, learn from authentic people, explore an array of products in fashion, beauty, home, pet, and wellness sectors, and even earn performance-based cash fees for sharing content. For brands and retailers, ORME offers free, simple, and fast integration with all e-commerce platforms and an easy, efficient, and controlled content creation process. The platform also boasts a personalized AI-powered content and product recommendation engine, a style chatbot, and a content editor filter.

ORME aims to solve the issues with low conversion rates with affiliate, influencer and digital marketing, and the lack of an end-to-end SFV platform in the US. According to McKinsey & Company, on average, 28% of video shopping leads are converted into sales, a statistic that ORME plans to capitalize on.

The SFV and social commerce market is growing rapidly. Affiliate and banner marketing is a $12 billion market globally, with video shopping projected to be a $35 billion market in the US in 2024. Social media influencer marketing spend by brands was around $16.4 billion in 2022 and is increasing at a rate of 18.8% per annum.

About Xcel Brands

Xcel Brands, Inc. (NASDAQ: XELB) is a media and consumer products company engaged in the design, marketing, live streaming, social commerce sales of branded apparel, footwear, accessories, fine jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. Xcel was founded in 2011 with a vision to reimagine shopping, entertainment, and social media as one thing. Xcel owns the Judith Ripka, Halston, LOGO by Lori Goldstein, and C. Wonder by Christian Siriano brands and a minority stake in the Isaac Mizrahi brand. It also owns and manages the Longaberger brand through its controlling interest in Longaberger Licensing LLC and a 50% interest in a JV in TWRHLL (“Tower Hill”) by Christie Brinkley. Xcel is pioneering a true modern consumer products sales strategy which includes the promotion and sale of products under its brands through interactive television, digital live-stream shopping, social commerce, brick-and-mortar retail, and e-commerce channels to be everywhere its customer’s shop. The company’s brands have generated in excess of $4 billion in retail sales via livestreaming in interactive television and digital channels alone. Headquartered in New York City, Xcel Brands is led by an executive team with significant live streaming, production, merchandising, design, marketing, retailing, and licensing experience, and a proven track record of success in elevating branded consumer products companies. www.xcelbrands.com.

About ORME

ORME is based in New York and is a next generation short form video marketplace inspiring our users through honest and authentic content created by shoppers, creators, influencers and brands wherever they create, watch, listen, connect and socialize in the digital universe. ORME was cofounded by Xcel Brands and KonnectBio, Inc.

ORME is committed to evolving through innovations in technology including the major application of AI, making deep connections with our users and community and providing opportunity to all in the retail commerce flywheel. ORME makes the everyday shopper a paid influencer. www.ormelive.com

Forward Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “ongoing,” “could,” “estimates,” “expects,” “intends,” “may,” “appears,” “suggests,” “future,” “likely,” “goal,” “plans,” “potential,” “projects,” “predicts,” “seeks,” “should,” “would,” “guidance,” “confident” or “will” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements regarding our anticipated revenue, expenses, profitability, strategic plans and capital needs. These statements are based on information available to us on the date hereof and our current expectations, estimates and projections and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including, without limitation, the risks discussed in the “Risk Factors” section and elsewhere in the Company’s Annual Report on form 10-K for the year ended December 31, 2022 and its other filings with the SEC, which may cause our or our industry’s actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time, and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

For further information please contact:

Dave Gentry, CEO
RedChip Companies Inc.
407-491-4498
XELB@redchip.com

Source: Xcel Brands, Inc


Digital, Media & Technology Industry Report: Outlook For 2024

Tuesday, January 16, 2024

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

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

Refer to the bottom of the report for important disclosures

Optimism For A Good 2024. In this report, we provide our advertising outlook for 2024 and provide our best picks to play the expected advertising rebound. Our take on the year is based on an improving economic outlook, particularly in the second half of the year, and heavy influx of Political advertising. Our favorable advertising outlook is based on a resilient labor market and lower interest rates to avoid a recession in 2024.

Have we seen the trough for this cycleWith our economic scenario in mind, we anticipate an improving economic environment in the second half of 2024. Notably, we believe that advertising trends are improving into the first quarter 2024, with the rate of decline moderating for both Radio and Television. 

National advertising expected to strengthen. The weakness in National was the biggest issue for broadcasters in 2023. We believe that National advertising trends should improve in 2024 both from the perspective of a sluggish consumer in the first half and from an improving economic outlook in the second half.

How big will Political be? We anticipate a strong political advertising environment in 2024, an increase of 13% to roughly $10 billion from 2020 levels. Importantly, about half of the high margin political advertising dollars are expected to be spent with television broadcasters. 

Highlights of favorite picks for 2024. Media stocks are typically early cycle stocks, which tend to outperform in the midst of the economic downturn or trough as investors begin to anticipate economic improvement. We believe media stocks are timely and offer a compelling return potential given depressed valuations. In addition, some companies pay a dividend, offering attractive total return potential.

Investment Appraisal

Optimism For A Good 2024

The fortunes of advertising based companies are driven by the economy and the health of the consumer. As such, we start this report with our take on the economy in 2024. On December 4th, at Florida Atlantic University (FAU) in Boca Raton, Florida, Noblecon19 hosted an economic panel to discuss the business environment outlook for 2024. The economic panel consisted of a diverse group of industry professionals with a wide range of expertise and experience. In our economic outlook for 2024, we take into consideration the perspective of Jose Torres, Senior Economist at Interactive Brokers.

Mr. Torres highlighted 2023 as a resilient year for consumer spending, which was driven by excess pandemic savings accumulated in 2020 and 2021. Mr. Torres anticipates a slowdown in consumer spending and a strong labor market in 2024. Notably, he believes a resilient labor market will keep consumers spending and will keep the country from falling into a recession. Additionally, Mr. Torres highlighted that Personal Consumption Expenditures (PCE) annualized inflation over the last six months is running near 2.5%, which is very close to the FED’s goal of 2.0%. With moderating inflation pressures, Mr. Torres highlighted that the FED is likely to cut rates in March of 2024, which would be beneficial for small and mid-cap companies. While Mr. Torres largely has a positive outlook for 2024 and beyond, a point of concern was the federal government’s growing interest expense on debt, he noted that the government will eventually have to reduce spending or accept 3% – 3.5% inflation over the long-term.

The general U.S. economy is expected to soften in 2024, particularly in the first half, with a prospect that the economy could slip into recession. Our economic scenario for 2024 anticipates the economy will soften in the first half of the year and rebound in the second half of the year due to the prospect of a lower interest rate environment and resilient labor market.

The video of the Economic Perspectives panel may be viewed here

Small Cap Cycle?

Small cap investors have gone through a rough period. For the past several years, investors have anticipated an economic downturn. With these concerns, investors turned toward “safe haven” large cap stocks, which by and large can weather economic downturns and have significant trading volume should investors need to sell their positions. Notably, there is a sizable valuation disparity between the two classes, large cap and small cap, one of the largest since 1999. Some of the small cap stocks we follow trade at a modest 2.5 times Enterprise Value to EBITDA, compared with large cap valuations as high as 15 times. We believe the disparity is due to higher risk in the small cap stocks, given that some companies may not be cash flow positive, have capital needs, or have limited share float. However, investors seem to have overlooked small cap stocks with favorable fundamentals. While small cap stocks are more speculative than large caps, many are growing revenues and cash flow, have capable balance sheets, and/or are cash flow positive. In our view, the valuation gap should resolve itself over time for attractive emerging growth stocks. Some market strategists suggest that small cap stocks trade at the most undervalued in the market.

Dan Thelen, Managing Director of small cap equity at Ancora Advisors, highlighted the valuation gap between small cap and large cap stocks during the economic panel at Noblecon19 on December 5, 2023. Mr. Thelen noted that investors are not recognizing the risk mitigation efforts small cap companies have undertaken in the high interest rate environment. He believes that changes small cap companies have implemented are not reflected in stock prices and should be a tailwind moving forward. Again, his comments can be viewed on the video of the Economic Perspectives panel here

2024 Advertising Outlook

In our advertising outlook for 2024, we take into consideration the perspective of Lisa Knutson, Chief Operating Officer (COO) of E.W Scripps. Ms. Knutson is on the frontline of the economy as one of the largest TV broadcasters in the country. As a speaker on the Noblecon19 economic panel, she depicted the local and national advertising markets as a tale of two cities. Notably, Ms. Knutson highlighted resilience in local advertising and sequential improvement over the past few quarters in the auto advertising category. Additionally, she highlighted green shoots in local advertising, particularly in the services, home improvement and retail advertising categories. Importantly, political ad spend for the 2024 election cycle is expected to be approximately $10 billion, which is roughly a 13% increase from 2020, as illustrated in Figure #1 Political Ad Spend. About half of the high margin political advertising dollars are expected to be spent with television broadcasters. Our advertising forecast for television, radio and digital are highlighted later in this report. 

Figure #1 Political Ad spend

Source: Statista

Stock Recommendations

With our economic scenario in mind, we have identified certain media stocks that should perform well and/or lead the industry as economic prospects improve. Media stocks are typically early cycle stocks. This means that the stocks tend to outperform in the midst of the economic downturn or trough as investors begin to anticipate economic improvement. In addition, small cap stocks in general have been out of favor, with many stocks trading at historic low stock valuations (over the past several economic cycles) and also relative to the valuations of leadership stocks, such as the Magnificent 7 (Apple, Microsoft, Alphabet (Google), Netflix, Amazon, Nvidia and Tesla). This report highlights some of our favorite picks for 2024. Our favorites include companies that are leveraged to benefit from the influx of Political advertising and improving economy, generate positive free cash flow, and have capable balance sheets to invest it growth initiatives. Finally, we recommend stocks that have compelling valuations and/or pay a dividend to provide an attractive total return investment opportunity. 

Digital Media & Technology

Decelerating Revenue Growth, But Faster Than Other Advertising Categories

Digital Advertising has been growing rapidly over the past several years, bolstered by cord-cutting trends and generally, by an increasingly digital world. Digital Advertising includes various categories of advertising, such as audio, video, influencer, search, banner, and others. According to Statista, U.S. Digital Advertising spending is expected to grow at 15% Compound Annual Growth Rate (CAGR), from 2017-2028, from $90.1 billion to $402.1 billion. Figure #2 U.S. Digital Advertising Spend illustrates the 2017-2028 forecast, which is inclusive of the various different sub-categories of Digital Advertising.

Figure #2 U.S. Digital Advertising Spend

Source: Statista

Specifically in 2024, U.S. Digital Advertising is expected to grow a healthy 10% above 2023 levels, according to Statista. There are some categories of Digital Advertising, however, that are expected to grow especially fast in 2024, such as Connected TV (CTV) advertising, programmatic advertising, and influencer advertising. All three categorizations of Digital advertising are estimated to have above-average growth in 2024. According to Statista, influencer advertising in the U.S. will grow at 14% in 2024, while, according to eMarketer, U.S. programmatic and CTV advertising will grow at 13% and 17%, respectively.

In our view, there are several key factors strengthening these verticals. For example, influencer advertising allows brands to reach younger demographics through personalities those audiences trust. Moreover, during a time when there is uncertainty around the future of cookies and other forms of User IDs for targeted advertising, influencer advertising offers an alternative vehicle for audience targeting. Google has indicated plans to no longer use 3rd party cookies to deliver advertising in 2024, although the implementation of this plan has been delayed multiple times before. Additionally, we believe cord cutting is a major factor in the growth of connected TV, likely to be a strong growth vertical for programmatic digital advertising. 

Noble’s Digital Media indices fared well over the past year with most outperforming the S&P 500 over that span, as illustrated in Figure #4 Digital Media LTM Performance. Most recently, the Social Media and Marketing Tech indices have performed strongest, up 18.9% and 24.2%, respectively, over the last 3-months. Figure #3 Digital Media 3-month Performance illustrates the last quarter’s performance by Noble’s Digital Media indices. However, many of the indices were skewed positively by the strong stock performance of the larger cap constituents. For example, META was up 194% over the trailing 12 months, while Adobe (ADBE) and Salesforce (CRM) also performed well, up 77% and 98%, over the same timeframe, respectively. Yet, in Q4 the performance disparity began to abate with the smaller cap constituents of Noble’s Digital indices contributing more to the positive returns, for the most part. We believe this could signal the beginning of shift towards the smaller cap stocks that had depressed valuations in 2023 relative to their large cap counterparts.  

Despite the large cap versus small cap valuation disparity in 2023, there are several small cap stocks that performed well over the past 12 months, outshining respective indices. Notably, Direct Digital Holdings (DRCT) was up roughly 500% over the past year. Most of the runup of DRCT occurred late in Q4, after the company reported results far exceeding Street estimates. In our view, DRCT was substantially undervalued and is beginning to be discovered by more investors. Importantly, the increased trading activity has put the stock on investing screens for institutional, small cap investors. Another notable small cap performance was Townsquare Media (TSQ), which has a large Digital Advertising component to its business. TSQ was up 45% in the past year. 

Below, we outlined some of the investment highlights for our closely followed Digital Media companies. In addition, Figure #5  Ad Tech Industry Comparables highlights the stock valuations of the sector. As the chart depicts, our favorite stocks current trade well below the averages for the industry and some of the larger cap names. One of our closely followed companies, AdTheorent, is a stand out. Near current levels, the ADTH shares trade at a modest 2.5 times Enterprise Value to our 2024 Adj. EBITDA estimate, well below the 15.1 times average for the sector. Given the compelling stock valuation, we highlight this company as our current favorite in the industry. In addition, the Direct Digital shares trade at 10 times Enterprise Value to our 2024 Adj. EBITDA estimate, well below the 15.1 times industry average. As such, we view the DRCT shares as compelling. 

Figure #3 Digital Media 3-month Performance

Source: Capital IQ 

Figure #4 Digital Media LTM Performance

Source: Capital IQ

Direct Digital Holdings (DRCT) – Programmatic Advertising. We view DRCT as a compelling play on the Programmatic Advertising market. The company operates a sell-side platform (SSP), in addition to servicing buy-side advertising clients through managing their digital advertising strategies. Importantly, the company’s niche comes from its deep relationships with multi-cultural publishers, a key competitive advantage in our view. In 2024, we estimate the company’s revenue will grow 30% above our 2023 forecast with adj. EBITDA growth of 33%. For research reports and important disclosures, please click here.

AdTheorent (ADTH) – Programmatic Advertising. ADTH is a unique play on programmatic advertising with cutting-edge audience targeting capabilities, powered by its machine learning (ML) platform. Due to its ML platform, the company does not need to use third-party cookies and other forms of user IDs to target audiences. Not only does this position the company well for Google’s phasing our of third-party cookies, but it also allows the company to offer clients a privacy-forward method of audience targeting. Some key verticals for the company include the healthcare industry as well as connected TV. For research reports and important disclosures, please click here.     

Townsquare Media (TSQ) – Programmatic & SMB Digital Advertising. TSQ is a media company that has transformed from primarily a radio station operator to a Digital Advertising business, boasting multiple digital verticals. We believe it is a compelling play on the digital transition occurring in small business across the country. The company provides comprehensive digital marketing services to small and medium-sized businesses in its radio markets, leveraging its deep local relationships. Additionally, the company operates a programmatic advertising business, which is benefiting from the growth of CTV.  For research reports and important disclosures, please click here.

Entravision Communications (EVC) – Programmatic & Social Media Advertising. EVC is one of our favorite social media advertising plays. The company serves as Meta’s exclusive ad agency in several emerging markets, such as, certain regions of Latin America. It also represents TikTok in parts of Asia. In addition, the company owns a programmatic agency, known as Smadex. For research reports and important disclosures, please click here

Figure #5 Ad Tech Industry Comparables

Source: Noble estimates & Company filings

Traditional Media

The Largest Caps Performed The Best

The Newspaper Index was the only traditional media sector that outperformed the general market in the past quarter and trailing 12 months, as illustrated in Figure #7 Traditional Media LTM Performance. In the latest quarter, Newspaper stocks outperformed the general market, up 20.4% versus down 11.2% for the general market as measured by the S&P 500 Index. Notably, our index performances are market cap weighted, meaning larger cap stocks have a greater impact on index return than small cap stocks. In Q4, only two stocks in the Newspaper index, NYT and NWSA, posted positive returns. These were the largest cap stocks in the index. In Q4, NWSA and NYT were up 22.4% and 18.9%, respectively. For full year 2023, four out of the five companies in the Newspaper index posted positive returns, the strongest performers were NYT and NWSA, up 50.9% and 34.9%, respectively. The Broadcast TV Index was up a modest 5.2% for the quarter and down 11% over the past year. The worst performing index over the last quarter was the Radio Broadcast index, down on 10.9%, as Illustrated in Figure #6 Traditional Media 3-Month Performance. Additionally, the Radio stocks were the worst performing group over the last year as well, down 34.9%. While the Radio Broadcast Index and Broadcast TV Index had a tough year in 2023, we believe both indices should improve in 2024. We highlight some of our favorites in the sector commentary below. 

Figure #6 Traditional Media 3-month Performance

Source: Capital IQ

Figure #7 Traditional Media LTM Performance

Source: Capital IQ

Television Broadcast

Looking For A Better 2024

The Television industry had a tough year with soft core advertising and the absence of the year earlier Political advertising. Television revenues are estimated to have declined as much as 20% in 2023 inclusive of the absence of year earlier Political advertising. Total core television advertising is expected to have decline 3% in 2023, which excludes Political advertising, reflecting disproportionately weak National advertising and resilient Local advertising. Importantly, Television advertising accounts for less than 50% of total television revenue, with Retransmission revenue largely accounting for the balance. With growth in Retransmission revenue, we estimate that total Television revenue declined roughly 10% in 2023. 

We believe that revenue trends will improve in 2024 for the TV industry, supported by an influx of Political advertising and moderating trends in core National advertising. Nonetheless, given the exceptional Political advertising year that is expected, core advertising is expected to decline in 2024, with some advertising being displaced by the large volume of Political. We anticipate that Core advertising will decline roughly 2.3% in 2024, with total TV advertising up nearly 30% (reflective of the influx of Political). Total Television revenue, which includes Retransmission revenues, are expected to increase roughly 20%. 

We believe that the TV industry has some long term fundamental headwinds, which include continued weak audience trends, cord cutting (which adversely affects Retransmission revenue growth opportunities), and shifts in National advertising toward Digital and Influence Marketing. Offsetting these trends are Connected TV and prospects for new revenue opportunities offered by the new broadcast standard, ATSC 3.0. Importantly, the very high margin Political advertising every even year allows the industry to reduce debt and/or return capital to shareholders.

Our closely followed Television companies, E.W. Scripps and Gray TV, are among the two companies best positioned to benefit for the influx of Political advertising. Both are in swing markets that should disproportionately benefit from Political. In the case of E.W. Scripps, the company has a developed business model that benefits from cord cutting as consumers switch toward Connected TV and Over The Air Networks. Furthermore, in 2024, E.W. Scripps will benefit from double digit growth in Retransmission revenue as 75% of its subscribers have been renegotiated at significantly higher rates. Both companies, E.W. Scripps and Gray, are highly debt levered. As such, we believe that paring down debt should improve the equity value of the shares in 2024. In addition, we believe that both companies have compelling stock valuations. While the SSP and the GTN shares trade near the industry averages, the industry averages are well below past cycles. We would look for multiple expansion as economic prospects improve. At the same time, as free cash flow improves from high margin Political advertising, debt reduction should allow for a swing toward improved equity values. As such, the shares of SSP and GTN represent a compelling way to play both an improved economic outlook towards the second half of 2024 and influx of high margin Political advertising. Again, SSP has the benefit of strong growth of Retransmission revenue, as well. 

E.W. Scripps (SSP): One of the nation’s largest TV station broadcasters and unique play on the trend toward cable cord cutting. Scripps has nationwide over the air networks that can be viewed with a digital antennae that do not require a cable or satellite service. Given its orientation toward national networks, the company is expected to disproportionately benefit from the influx of national advertising. In addition, the company’s TV stations are located in swing States and in hotly contested markets that should benefit from the influx of Political advertising in 2024. We believe the level of Political will be closely watched by investors as the high margin Political advertising will allow the company to aggressive pare down debt, assuaging investor concerns over its current leverage. For research reports and important disclosures, please click here

Gray Television (GTN): One of the nation’s largest television broadcasters, the company has historically led the industry in terms of revenue  and disproportionately benefits from the influx of Political advertising. In addition, the company is expected to benefit in 2024 from its investment in the development of its studios in the Atlanta area called Assembly Atlanta. The company has yet to disclose the full benefit of the current lease arrangement. We believe that the value of the development and the stream of lease payments are not fully reflected in the current stock valuation. Furthermore, the company is expected to aggressively pare down debt through the influx of high margin Political advertising and the lease payments. In our view, the shares should react well to debt reduction. For research reports and important disclosures, please click here.

Figure #8 TV Industry Comparables 

Source: Noble estimates & Company filings

Radio Broadcast

Debt Struggles

Based on our estimates and our closely followed companies, Radio advertising is expected to have decreased 5.5% for the full year 2023. Illustrated in Figure #9 Radio Advertising Revenue. This decline reflected the adverse impact of rising interest rates and significant inflation, which hurt many consumer oriented advertising categories, as well as financials. In addition, we believe that Radio struggled with some headwinds from declines in listenership, as many consumers continue to work remotely post Covid pandemic. Local advertising was more resilient than National, which tends to be more economically sensitive. We estimate that Local advertising was down 6%, while National was down 19%. The results are expected to reflect the absence of Political advertising from the year earlier biennial elections. Digital advertising was a bright spot, increasing 6%, largely offsetting the decline in National revenue. 

Figure #9 Radio Advertising Revenue 

Source: Statista

Looking forward toward 2024, we expect Radio advertising trends to improve throughout the year, with the expectation that December 2023 may have been the trough for this economic cycle. Both Local and National advertisers should begin to anticipate improved economic conditions with the expectation that the Fed will lower interest rates late in the first quarter. Even though the economy is anticipated to continue to weaken in the first half 2024, advertisers may advertise to drive customer traffic and in anticipation of improved economic conditions. We anticipate that the year will start off weak, with the first quarter 2024 revenue expected to be down, but a more moderate decrease between 3% to 4%. Notably, the industry does not receive a significant amount of Political advertising in the first quarter.

In 2024, we expect consumer spending to soften, which will have an adverse affect on consumer oriented advertising, particularly Retail. Auto advertising is expected to buck that trend. In our view, auto manufacturers and dealers will likely step up advertising and promotions to lure consumers. Assuming lowered interest rates, we expect that Financial advertising should improve in the second half of the year, as well. Revenues are expected to be second half weighted, with improving core advertising trends and the benefit of the influx of Political advertising. Radio does not typically receive a significant amount of Political advertising, but it accounts for a meaningful 3% of total core advertising for the year. Political advertising largely falls in the third and fourth quarter. In addition, National advertising trends should improve in the second half as economic prospects improve. Digital advertising is expected to grow but more moderately than 2023, which is expected to be up 6%. We believe that Digital will increase near 5%, but some companies that have less developed Digital businesses, should report faster growth. 

In total, based on our closely followed companies, we anticipate Radio revenue growth of 5.6% in 2024. Our estimate is inclusive of our Political advertising outlook.

We encourage investors to take a basket approach to investing in the industry, as most companies should benefit from the improving fundamentals in 2024. Below we have outlined some of the investment highlights for our closely followed Radio companies. In addition, Figure #10 Radio Industry Comparables highlight the stock valuations of the sector, which are currently trading at recession type valuations levels. 

Beasley Broadcast (BBGI): We believe that the company will reflect above average revenue and cash flow growth in 2024 due to the prospect of fast growth of its developing Digital businesses. Digital accounted for roughly 20% of the company’s total revenues in 2023 and are expected to be a key revenue driver in 2024. In addition, the company’s stations are located in large, swing State markets and should benefit from the influx of Political advertising. The company does carry above average debt loads, but we expect that the company will pare down debt by roughly $20 million from current levels. The company’s target debt levels are $250 million by year end. For a Beasley Broadcast report and important disclosures, please click here.

Cumulus Media (CMLS): The company is viewed as a leveraged play on a recovery in National advertising. Given the company’s Network business, which is virtually all National advertising, roughly 50% of total company revenues are derived from National advertising. This is significantly higher than the industry average, which is roughly 12%. National advertising is expected to rebound as economic prospects improve in 2024. In addition, the company should disproportionately benefit from the influx of Political advertising. We estimate $23.5 million in high margin Political advertising, a 20% increase from the last Presidential election cycle, expected to total roughly 3.7% of 2024 advertising revenues. For research reports and important disclosures, please click here.

Entravision (EVC): Radio represents a small portion of total company revenues as the company has transitioned toward a Digital agency business model. Over 80% of total company revenues comes from its Digital businesses. As such, Entravision should grow faster than Radio industry averages as its Digital business is expected to grow. Furthermore, Entravision has one of the best balance sheets in the industry, expected to have virtually no net debt by year end. Finally, the EVC shares are among the cheapest in the industry, as highlighted in Figure #    Radio Industry Comparables. For research reports and important disclosures, please click here.

Saga Communications (SGA): Historically, the company has led the industry in terms of revenue and cash flow growth. Over the past few years, it lost that honor as the industry moved to expand its fast growing digital operations. Most recently, Saga has regained its top spot as it has developed its Digital operations and non traditional radio revenue. While the industry has moved Digital to account for as much as 50% of total company revenues, Saga currently is at a more modest   %. Nonetheless, its nascent Digital operations are growing at a rapid rate, allowing total company revenues to exceed industry averages. Saga has one of the best balance sheets in the industry, with a large cash position and virtually no debt. Furthermore, the company pays an attractive dividend, and, as such, represents an attractive total return potential. The SGA shares are largely undiscovered, trading at one of the cheapest stock valuation in the radio sector. For research reports and important disclosures, please click here.

Salem Media Group (SALM): Salem has a relatively stable Radio advertising business given its orientation toward the sale of long and short form block programming. Recently, the company tripped a debt covenant which created investor anxiety over its high debt leverage. The company recently announced that it plans to sell its Salem Church Products division for $30 million, it refinanced its revolver, and announced the sale of its money losing book publishing company, Regnery. In addition to these measures, the company has streamlined its management team and lowered costs. Recently, the company decided to delist, rather than seek alternatives to remain on its current exchange. In addition, the company has not closed on its planned sale of its Church Products division. As such, we believe that the company has significant hurdles to put itself on a path toward free cash flow generation and debt reduction. For research reports and important disclosures, please click here.

Townsquare Media (TSQ): Townsquare has led the charge toward a Digital transformation, with over 50% of its revenues from its Digital businesses. Importantly, its Digital businesses have margins are in line or better than its traditional Broadcast business. While a segment of its Digital business declined in 2023, we expect that it will regain its revenue momentum in 2024, particularly in the second half. At that time, the company is expected to benefit from an influx of high margin Political advertising, as well. We believe that the company has one of the best Digital strategies in the industry and is widely viewed as the model for other aspiring Digital divisions at other Radio companies. The shares trade below that of its industry peers, in spite of its above average revenue and cash flow growth. For research reports and important disclosures, please click here.

Figure #10 Radio Industry Comparables 

Source: Noble estimates & Company filings

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Noble Capital Markets Media Sector Review – Q4 2023

INTERNET AND DIGITAL MEDIA COMMENTARY

Internet & Digital Media Stocks – Investors Rewarded with Exceptional Returns in 2023

A year ago, we wrote that we were seeing signs of life in the Internet and Digital Media sectors and saw the possibility of a better year ahead.  Not only was it a good year, but it was a great year for investors in these sectors.  The S&P 500 was up 25% in 2023, a healthy return but one that pales in comparison to the performance of each of Noble’s Internet and Digital Media Indices.  Noble’s Social Media Index finished the year up 172%, followed by Noble’s MarTech (+83%), AdTech (+67%), Digital Media (+58%) and Video Gaming (+29%) indices.

Noble’s indices are market cap driven, and last quarter we noted that while each sector performed well, it was primarily due to the largest cap stocks in each of them.  In 4Q 2023, we saw that strength broaden and deepen, with mid- and small-cap stocks also joining the “party”. 

Interestingly, this increase in performance from mid- and smaller cap stocks did not result in a material outperformance relative to the S&P 500 in the fourth quarter. The S&P 500 increased by 11% in 4Q 2023, but only two of these indices outperformed the broader market during this period: Noble’s MarTech Index (+24%) and Social Media Index (+19%).  Noble’s Video Gaming Index (+11%) was up in-line with the S&P 500, while Noble’s Digital Media (+9%) and Ad Tech (+0%) indices underperformed.  In short, while the mega cap stocks continued to outperform, this outperformance was matched or exceeded by mid- and small-cap stocks in the fourth quarter. 

Meta, Snap, and Grindr All Lead the Social Media Index Higher

Noble Indices are market cap weighted, and we attribute the relative strength of the Social Media Index to its largest constituent, Meta (META, +194%).  Meta shares were up 194% for the year, including 18% in the fourth quarter.  As noted before in this newsletter, Meta shares bottomed in November 2022 at $89 per share and began to recover when management decided to no longer invest as heavily in the metaverse and instead ordered a major cost-cutting initiative that included thousands of layoffs and re-focused the company’s resources toward new social media products (i.e., Threads) and generative AI (artificial intelligence). 

Other social media stocks such as Snap (SNAP, +89%) and Grindr (GRND, also +89%) significantly outperformed.  Snap shares increased as the company’s revenue returned to growth in the third quarter after declines in the first and second quarter of the year.  Grindr went public via SPAC in 4Q 2022 and its shares stumbled out of the gate but performed exceptionally well, especially in 4Q 2023 (+53%) as the company continued to post 40%+ revenue growth and 50%+ EBITDA growth.  There is no better recipe for share price appreciation than beating Street estimates and raising guidance.

MarTech Stocks Recover Strongly After Challenging 2022

Investors in the marketing technology sector were also rewarded in 2023.  Noble’s MarTech Index increased by 83%, led by Shopify (SHOP, +124%), Hubspot (HUBS, +111%), Salesforce (CRM, +99%) and Adobe (+77%).  MarTech stocks suffered in 2022 from a market reset in revenue multiples that began when the Fed began raising rates.

Another reason Noble’s MarTech Index was down 52% in 2022 was that most every company in this sector did not have operating profits or positive EBITDA, as companies in this sector, like most SaaS-based businesses were being operated to maximize revenues, not profitability.   MarTech companies appear to have gotten the message in 2023 and made great strides in terms of operating profits.  On average, operating margins significantly improved from low double-digit negative margins in 2022, to low single digit negative margins in 2023.

AdTech Stocks Rebounded Strongly in 2023

Noble’s Ad Tech Index increased by 67% in 2023, and returns were relatively widespread with more than half the stocks in the index posting double digit returns, led by Direct Digital Holdings (DRCT, +514%), AppLovin (APP, +278%), Inuvo (+92%), Double Verify (DSP, +68%), Interactive Ad Science (IAS, +64%) and The Trade Desk (+61%).  Shares of Direct Digital Holdings increased by 481% in the fourth quarter alone, as the company reported significantly stronger than expected revenue and EBITDA and guided to significantly higher than expected 4Q 2023 revenue and EBITDA as well.  Companies such as Double Verify, and Interactive Ad Science likely benefited as their ad platforms are designed to verify inventory and reduce fraud and waste.  The Trade Desk has also developed initiatives to address “cookie deprecation” (in which Google will end support for third-party cookies, or tracking tags).  It would appear that investors in the second half of 2024, investors sought out Ad Tech companies that are well positioned for this change. 

A Widespread Recovery in the Digital Media Sector

Noble’s Digital Media Index increased by 58% in 2023 with 8 of the 12 stocks in the index posting double digit stock price returns, led by Spotify (SPOT, +138%), Travelzoo (TZOO, +114%), Fubo (FUBO, +83%), and Netflix (NFLX, +65%).  Spotify posted double digit revenue growth while keeping expenses in check which resulted in a solid operating profit in 2023.  The company is making progress on converting its growing user base to a healthy profit.  Consensus Street estimates have Spotify’s EBITDA improving from a loss of  nearly $250 million in 2022 to a gain of $650 million in 2024.  Meanwhile, Travelzoo appears to be firing on all cylinders with revenue increasing by double digits in each of their U.S., European and Jack’s Fight Club businesses.  Travelzoo appears to be in the sweet spot of the economic cycle in which demand for travel is strong, but not so strong that the company’s clients (airlines, hotels, cruise lines, car rental companies, etc.) don’t need to advertise to drive incremental demand. 

We attribute much of the strong performance in 2023 in the Internet and Digital Media sectors to a change in investor sentiment most likely based upon the view that rather than go into recession, the U.S. economy may be more likely to incur a soft landing.  How this plays out in 2023 is likely to be the key to the performance of these industries in 2024.

2023 M&A – Deal Activity Flat while Deal Values Decline by Nearly 80% 

It should not surprise anyone that M&A in the Internet and Digital Media sectors was down in 2023.  For starters, 2022 was a very strong year for M&A, with deal values up 71% over 2021 levels.  On top of this difficult comparison, the M&A market in 2023 had to contend with numerous headwinds, including geopolitical tensions, inflation, rising interest rates, increased regulatory scrutiny and an uncertain economic outlook.  In light of all of these obstacles, it is surprising then, that the number of deals we monitored in the Internet and Digital Media sectors in 2023 was flat compared to 2022 (685 deals announced in 2023 vs. 683 deals announced in 2022).  This result would appear to be heroic were it not for the fact that total M&A deal values were down 79% in 2023 ($51 billion in announced deal values in 2023 vs. $243 billion in announced deal values in 2022).  Given the aforementioned headwinds, perhaps it is not surprising that the animal spirits to conduct large transactions waned in 2023. 

The biggest difference in the announced deal values was the number of “scaled transactions” in 2022 vs. 2023.  A year ago we called 2022 the Year of the Mega Deal.  For example, the were 6 announced deals in the Internet and Digital Media sectors with deal values exceeding $10 billion in 2022 vs. only one deal in 2023.  In 2022, Microsoft announced its $69 billion acquisition of Activision Blizzard and Elon Musk announced his $46 billion acquisition of Twitter.  In 2023, the only “scaled transaction” in the Internet and Digital Media sectors was the $14.6 billion acquisition of online classifieds company Adevinta ASA from a consortium of U.S. based private equity firms (General Atlantic, Permira and Blackstone). 

4Q 2023 M&A:  Greenshoots

Fortunately, there was a silver lining in the fourth quarter of 2023.  Deal activity picked up substantially on a sequential basis.  We monitored 199 announced transactions in 4Q 2023, up 50% over the 132 announced deals 3Q 2023.  Deal values in the fourth quarter of 2023 were also encouraging.  We monitored $20.1 billion in announced deal values last quarter, up 132% from the $8.7 billion in announced deals in 3Q 2023, as shown in the chart below.

From a deal activity perspective, the most active sectors we tracked were Digital Content (56 deals), Marketing Tech (54 deals), Agency & Analytics (46 deals), followed by eCommerce (16 deals) and Information (16 deals).  From a deal value perspective, the Digital Content sector had the largest dollar value of transactions ($15.8 billion, driven by the Adevinta deal), followed by MarTech ($2.2 billion), and AdTech ($1 billion). 

The largest deals by dollar value in the fourth quarter of 2023 are shown below.    

With stock prices recovering and the prospects for a soft landing improving, we believe the stage is being set for an improvement in the M&A environment in 2024.  A key to this outlook will be how soon and how fast the Federal Reserve begins to lower interest rates.  If inflation remains stubborn and rates remain higher for longer, then the recovery in M&A deal values is likely to take longer.   However, if rates begin to ease, it will remove a key impediment to closing transactions in 2024.

TRADITIONAL MEDIA COMMENTARY

The following is an excerpt from a recent note by Noble’s Media Equity Research Analyst Michael Kupinski

Overview – Optimism for a Good 2024 

The fortunes of advertising-based companies are driven by the economy and the health of the consumer. As such, we start this report with our take on the economy in 2024. On December 4th, at Florida Atlantic University (FAU) in Boca Raton, Florida, Noblecon19 hosted an economic panel to discuss the business environment outlook for 2024. The economic panel consisted of a diverse group of industry professionals with a wide range of expertise and experience. In our economic outlook for 2024, we take into consideration the perspective of Jose Torres, Senior Economist at Interactive Brokers.

Mr. Torres highlighted 2023 as a resilient year for consumer spending, which was driven by excess pandemic savings accumulated in 2020 and 2021. Mr. Torres anticipates a slowdown in consumer spending and a strong labor market in 2024. Notably, he believes a resilient labor market will keep consumers spending and will keep the country from falling into a recession. Additionally, Mr. Torres highlighted that Personal Consumption Expenditures (PCE) annualized inflation over the last six months is running near 2.5%, which is very close to the Fed’s goal of 2.0%. With moderating inflation pressures, Mr. Torres highlighted that the Fed is likely to cut rates in March of 2024, which would be beneficial for small and mid-cap companies. While Mr. Torres largely has a positive outlook for 2024 and beyond, a point of concern was the federal government’s growing interest expense on debt, he noted that the government will eventually have to reduce spending or accept 3% – 3.5% inflation over the long-term.

The general U.S. economy is expected to soften in 2024, particularly in the first half, with a prospect that the economy could slip into recession. Our economic scenario for 2024 anticipates the economy will soften in the first half of the year and rebound in the second half of the year due to the prospect of a lower interest rate environment and resilient labor market.

The video of the Economic Perspectives panel may be viewed here

Small Cap Cycle?

Small cap investors have gone through a rough period. For the past several years, investors have anticipated an economic downturn. With these concerns, investors turned toward “safe haven” large cap stocks, which by and large can weather economic downturns and have significant trading volume should investors need to sell the stock. Notably, there is a sizable valuation disparity between the two classes, large cap and small cap, one of the largest since 1999. Some of the small cap stocks we follow trade at a modest 2.5 times Enterprise Value to EBITDA, compared with large cap valuations as high as 15 times. We believe the disparity is due to higher risk in the small cap stocks, given that some companies may not be cash flow positive, have capital needs, or have limited share float.

However, investors seem to have overlooked small cap stocks with favorable fundamentals. While small cap stocks are more speculative than large caps, many are growing revenues and cash flow, have capable balance sheets, and/or are cash flow positive. In our view, the valuation gap should resolve itself over time for attractive emerging growth stocks. Some market strategists suggest that small cap stocks trade at the most undervalued in the market.

Dan Thelen, Managing Director of small cap equity at Ancora Advisors, highlighted the valuation gap between small cap and large cap stocks during the economic panel at Noblecon 19. Mr. Thelen noted that investors haven’t recognized the risk mitigation efforts small cap companies have undertaken in the high interest rate environment. He believes that changes small cap companies have implemented are not reflected in stock prices and should be a tailwind moving forward.

2024 Advertising Outlook

In our advertising outlook for 2024, we take into consideration the perspective of Lisa Knutson, Chief Operating Officer (COO) of E.W Scripps. Ms. Knutson is on the frontline of the economy as one of the largest TV broadcasters in the country. As a speaker on the Noblecon 19 economic panel, she depicted the local and national advertising markets as a tale of two cities. Notably, Ms. Knutson highlighted resilience in local advertising and sequential improvement over the past few quarters in the auto advertising category. Additionally, she highlighted green shoots in local advertising, particularly in the services, home improvement and retail advertising categories. Importantly, political ad spend for the 2024 election cycle is expected to be approximately $10 billion, which is roughly a 13% increase from 2020.  About half of the high margin political advertising dollars are expected to be spent with television broadcasters.

Digital Advertising – Decelerating Revenue Growth, But Faster Than Other Advertising Categories

Digital advertising has been growing rapidly over the past several years, bolstered by chord-cutting trends and generally, by an increasingly digital world. Digital Advertising includes various categories of advertising, such as audio, video, influencer, search, banner, and others. According to Statista, U.S. Digital Advertising spending is expected to grow at 15% Compound Annual Growth Rate (CAGR), from 2017-2028, from $90.1 billion to $402.1 billion. The chart below  illustrates U.S. Digital Advertising Spend from 2017 to 2028, which is inclusive of the various different sub-categories of digital advertising.

Specifically in 2024, U.S. digital advertising is expected to grow a healthy 10% above 2023 levels, according to Statista. There are some categories of digital advertising that are expected to grow especially fast in 2024, such as Connected TV (CTV) advertising, programmatic advertising, and influencer advertising. All three categorizations of digital advertising are estimated to have above-average growth in 2024. According to Statista, influencer advertising in the U.S. will grow at 14% in 2024, while, according to eMarketer, U.S. programmatic and CTV advertising will grow at 13% and 17%, respectively.

In our view, there are several key factors strengthening these verticals. For example, influencer advertising allows brands to reach younger demographics through personalities those demographics trust. Moreover, during a time when there is uncertainty around the future of cookies and other forms of User IDs for targeted advertising, influencer advertising offers an alternative vehicle for audience targeting. Google has indicated plans to no longer use cookies to deliver advertising in 2024, although the implementation of this plan has been delayed before. Additionally, we believe chord cutting is major factor in the growth of connected TV. We believe this could be a strong growth vertical for programmatic digital advertising. 

Traditional Media

The Newspaper Index was the only traditional media sector that outperformed the general market in the past quarter and trailing 12 months.   In the latest quarter, Newspaper stocks outperformed the general market, up 20% versus down 11% for the general market as measured by the S&P 500 Index. Notably, our index performances are market cap weighted, meaning larger cap stocks have a greater impact on index return than small cap stocks. In Q4, only two stocks in the Newspaper index, NYT and NWSA, posted positive returns. These are the largest cap stocks in the index. In Q4, NWSA and NYT were up 22% and 19%, respectively. For full-year 2023, four out of the five companies in the Newspaper index posted positive returns, with  the strongest performers being NYT and NWSA, up 51% and 35%, respectively. The Broadcast TV Index was up a modest 5% for the fourth quarter and down 11% over the past year. The worst performing index over the last quarter was the Radio Broadcast index, down on 11% in the fourth quarter. Additionally, the Radio Index was the worst performing group over the last year as well, down 35%. While the Radio Broadcast Index and Broadcast TV Index had a tough year in 2023, we believe both indices should improve in 2024.

Broadcast Television

The Television industry had a tough year with soft core advertising and the absence of the year earlier political advertising. Television revenues are estimated to have declined as much as 20% in 2023 inclusive of the absence of year earlier political advertising. Total core television advertising is expected to have declined 3% in 2023, which excludes Political advertising, reflecting disproportionately weak national advertising and resilient local advertising. Importantly, television advertising accounts for less than 50% of total television revenue, with retransmission revenue largely accounting for the balance. With growth in retransmission revenue, we estimate that total television revenue declined roughly 10% in 2023. 

We believe that revenue trends will improve in 2024 for the TV industry, supported by an influx of political advertising and moderating trends in core national advertising. Nonetheless, given the exceptional political advertising year that is expected, core advertising is expected to decline in 2024, with some advertising being displaced by the large volume of political. We anticipate that core advertising will decline roughly 2.3% in 2024, with total TV advertising up nearly 30% (including the influx of Political). Total television revenue, which includes retransmission revenues, are expected to increase roughly 20%. 

We believe that the TV industry has some long-term fundamental headwinds, which include continued weak audience trends, cord cutting (which adversely affects retransmission revenue growth opportunities) and shifts in national advertising toward digital advertising. Offsetting these trends are Connected TV and prospects for new revenue opportunities offered by the new broadcast standard, ATSC 3.0. Importantly, the very high margin political advertising every even year allows the industry to reduce debt and/or return capital to shareholders.

Broadcast Radio

Based on our estimates and our closely followed companies, radio advertising is expected to have decreased 5.5% for the full year 2023 as illustrated in the chart below.   This decline reflected the adverse impact of rising interest rates and significant inflation, which hurt many consumer-oriented advertising categories, as well as financials. In addition, we believe that radio struggled with some headwinds from declines in listenership, as many consumers continue to work remotely post Covid pandemic. Local advertising was more resilient than national advertising, which tends to be more economically sensitive.

We estimate that local advertising was down 6%, while national was down 19%. The results are expected to reflect the absence of political advertising from the year earlier biennial elections. Broadcast digital advertising was a bright spot, increasing 6%, largely offsetting the decline in national revenue. 

Looking forward toward 2024, we expect radio advertising trends to improve throughout the year, with the expectation that December 2023 may have been the trough for this economic cycle. Both local and national advertisers should begin to anticipate improved economic conditions with the expectation that the Fed will lower interest rates late in the first quarter. Even though the economy is anticipated to continue to weaken in the first half 2024, advertisers may advertise to drive customer traffic in anticipation of improved economic conditions. We anticipate that the year will start off weak, with the first quarter 2024 revenue expected to be down, but at a more moderate decrease of between 3% to 4%. Notably, the industry does not receive a significant amount of political advertising in the first quarter.

In 2024, we expect consumer spending to soften, which will have an adverse effect on consumer-oriented advertising, particularly retail. Auto advertising is expected to buck that trend. In our view, auto manufacturers and dealers will likely increase advertising and promotions to lure consumers. Assuming lowered interest rates, we expect that the financial category should improve in the second half of the year as well. Revenues are expected to be second half weighted, with improving core advertising trends and the benefit of the influx of political advertising.

Radio does not typically receive a significant amount of political advertising, but it accounts for a meaningful 3% of total core advertising for the year. Political advertising largely falls in the third and fourth quarter. In addition, national advertising trends should improve in the second half as economic prospects improve. Digital advertising is expected to grow but more moderately than 2023, which is expected to be up 6%. We believe that Digital will increase near 5%, but some companies that have less developed digital businesses, should report faster growth. 

In total, based on our closely followed companies, we anticipate Radio revenue growth of 5.6% in 2024. Our estimate is inclusive of our political advertising outlook.

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Noble Capital Markets Media Newsletter Q4 2023

This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this news letter, please contact Chris Ensley

DISCLAIMER

All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.

Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter.

Release – Harte Hanks Extends Line of Credit with Texas Capital Bank

Research News and Market Data on HHS

Extends Existing Line of Credit by Six Months

CHELMSFORD, MA / ACCESSWIRE / January 4, 2024 / Harte Hanks, Inc. (NASDAQ:HHS), a leading global customer experience company focused on bringing companies closer to customers for 100 years, today announced that the company has extended its $25 million secured revolving line of credit with Texas Capital Bank for an additional six (6) month term, beyond its original maturity date in December, 2024. The revised loan agreement, which now matures at the end of June, 2025, will enhance the Company’s financial flexibility and provide the Company with operational stability over this extended term.

The Company intends to use the credit facility for working capital and to create growth opportunities by investing in and enhancing client offerings.

“Texas Capital continues to be an important partner for Harte Hanks, and we are gratified in their confidence to extend our line of credit,” commented Kirk Davis, Harte Hanks’ Chief Executive Officer. “Having launched our transformation plan, Elevate, in Q3 of 2023, this successful extension supports our growth and transformation initiatives for the future.”

About Harte Hanks:

Harte Hanks (NASDAQ:HHS) is a leading global customer experience company whose mission is to partner with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract and engage their customers.

Using its unparalleled resources and award-winning talent in the areas of Customer Care, Fulfillment and Logistics, and Marketing Services, Harte Hanks has a proven track record of driving results for some of the world’s premier brands, including HBOMax, GlaxoSmithKline, Unilever, Pfizer, Volvo, Ford, FedEx, Midea, Sony and IBM among others. Headquartered in Chelmsford, Massachusetts, Harte Hanks has over 2,500 employees in offices across the Americas, Europe, and Asia Pacific.

For more information, visit hartehanks.com

As used herein, “Harte Hanks” or “the Company” refers to Harte Hanks, Inc. and/or its applicable operating subsidiaries, as the context may require. Harte Hanks’ logo and name are trademarks of Harte Hanks, Inc.

Cautionary Note Regarding Forward-Looking Statements:

Our press release and related earnings conference call contain “forward-looking statements” within the meaning of U.S. federal securities laws. All such statements are qualified by this cautionary note, provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements other than historical facts are forward-looking and may be identified by words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “seeks,” “could,” “intends,” or words of similar meaning. These forward-looking statements are based on current information, expectations and estimates and involve risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from what is expressed in or indicated by the forward-looking statements. In that event, our business, financial condition, results of operations or liquidity could be materially adversely affected and investors in our securities could lose part or all of their investments. These risks, uncertainties, assumptions and other factors include: (a) local, national and international economic and business conditions, including (i) the outbreak of diseases, such as the COVID-19 coronavirus, which has curtailed travel to and from certain countries and geographic regions, created supply chain disruption and shortages, disrupted business operations and reduced consumer spending, (ii) market conditions that may adversely impact marketing expenditures, (iii) the impact of the Russia/Ukraine conflict on the global economy and our business, including impacts from related sanctions and export controls and (iv) the impact of economic environments and competitive pressures on the financial condition, marketing expenditures and activities of our clients and prospects; (b) the demand for our products and services by clients and prospective clients, including (i) the willingness of existing clients to maintain or increase their spending on products and services that are or remain profitable for us, and (ii) our ability to predict changes in client needs and preferences; (c) economic and other business factors that impact the industry verticals we serve, including competition and consolidation of current and prospective clients, vendors and partners in these verticals; (d) our ability to manage and timely adjust our facilities, capacity, workforce and cost structure to effectively serve our clients; (e) our ability to improve our processes and to provide new products and services in a timely and cost-effective manner though development, license, partnership or acquisition; (f) our ability to protect our facilities against security breaches and other interruptions and to protect sensitive personal information of our clients and their customers; (g) our ability to respond to increasing concern, regulation and legal action over consumer privacy issues, including changing requirements for collection, processing and use of information; (h) the impact of privacy and other regulations, including restrictions on unsolicited marketing communications and other consumer protection laws; (i) fluctuations in fuel prices, paper prices, postal rates and postal delivery schedules; (j) the number of shares, if any, that we may repurchase in connection with our repurchase program; (k) unanticipated developments regarding litigation or other contingent liabilities; (l) our ability to complete anticipated divestitures and reorganizations, including cost-saving initiatives; (m) our ability to realize the expected tax refunds; and (n) other factors discussed from time to time in our filings with the Securities and Exchange Commission, including under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 which was filed on March 31, 2023. The forward-looking statements in this press release and our related earnings conference call are made only as of the date hereof, and we undertake no obligation to update publicly any forward-looking statement, even if new information becomes available or other events occur in the future.

Investor Relations Contact:

Rob Fink or Tom Baumann
646.809.4048 / 646.349.6641
FNK IR
HHS@fnkir.com

SOURCE: Harte Hanks, Inc.



View the original press release on accesswire.com

Release – Greater Boston-Based Harte Hanks Continues Growth Phase with Addition of Global Advertising Executive Elizabeth Ross to Board of Directors

Research News and Market Data on HHS

After relocating its Headquarters to Massachusetts, the 100-year-old public company is optimizing its growth strategy with operational and leadership advancements

CHELMSFORD, MA / ACCESSWIRE / January 3, 2024 / Harte Hanks, Inc. (NASDAQ:HHS), a global sales, marketing, and customer experience company with 3,000 employees in 10 offices worldwide, announced this week the addition of corporate advertising leader Elizabeth Ross to the Board of Directors, effective January 2, 2024. Ross’s appointment to the Board is a well-planned part of Harte Hanks’ exciting growth-phase strategy, launched in 2023 with the company’s 100-year anniversary and appointment of industry-veteran Kirk Davis as the new CEO.

As the current CEO of Shift Paradigm, a leading growth and technology business partner, Elizabeth Ross brings decades of agency experience in B2B and B2C marketing. She is a growth-focused executive with expertise creating concepts and driving value for some of the world’s biggest brands, including Target, United Health, PepsiCo, Walmart, and Microsoft.

“In building our Board, we knew we wanted a strategic and creative thinker with a track record of driving growth and value. Elizabeth Ross is an excellent fit for us. Harte Hanks is a customer company-we help our clients better understand, attract, and engage their customers. Elizabeth brings a tremendous amount of real market knowledge and experience to this customer-facing domain. We are very pleased to welcome her to Harte Hanks,” said Jack Griffin, Chairman of the Board of Directors.

“I’ve spent a lot of my career at the intersection of technology, people, and insights, and Harte Hanks is a dynamic company innovating in this space on a global scale,” says Elizabeth Ross. “I’m honored and excited to join the Board. Harte Hanks is very well positioned to build on its impressive base of services. In my many conversations with Kirk [Davis] and the Board, it’s clear we share a growth and development mindset and a vision of capitalizing on advancements in technology to personalize and improve business services and transactions.”

“Elizabeth’s deep experience in formulating marketing strategy, applying technology to business, expanding client relationships and leading agencies adds immediate strategic value to our plans for 2024,” says Kirk Davis, CEO. “Technology-driven agency services are a segment of the Harte Hanks portfolio we plan to grow in 2024-2025, so her insight and background will be an important asset to us.”

Founded in 1923, Harte Hanks is a leading global customer experience company that partners with clients to provide CX strategy, data-driven analytics and actionable insights combined with seamless program execution for optimized customer engagement. Harte Hanks drives measurable results in both sales and customer loyalty for an ever-growing list of blue-chip companies and their brands including HBOMax, GlaxoSmithKline, Unilever, Pfizer, Volvo, Ford, FedEx, Blue Cross/Blue Shield, Sony, IBM, and more.

For More Information, please contact:
Robert Wyman
Robert.Wyman@HarteHanks.com
978-265-8919

SOURCE: Harte Hanks, Inc.



View the original press release on accesswire.com

Cumulus Media (CMLS) – Highlights From Noblecon19: A National Recovery Play


Tuesday, December 19, 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.

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

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

Noblecon19. On December 4th, management presented at Noblecon19 at Florida Atlantic University (FAU) in Boca Raton, Florida, to the investment community. The presentation conducted by Frank Lopez-Balboa, CFO, highlighted the company’s digital growth initiatives, debt reduction focus and provided insight into the current advertising environment. A replay of the presentation can be viewed here: https://www.channelchek.com/videos/cumulus-media-noblecon19-replay.

Digital growth initiatives. Management highlighted its digital growth strategy and key drivers for podcasting and digital marketing services (DMS) growth. Importantly, 50% of digital revenues are derived from national adverting, thus an improvement in the national advertising environment would positively impact digital revenue. Notably, the company has increased its focus on growing its hyper-local Digital Marketing Services business, a development we view favorably.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*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. 

Direct Digital Holdings (DRCT) – Highlights From Noblecon19; Raising Price Target


Tuesday, December 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.

Noblecon19. On December 5th, management presented at Noblecon19 at Florida Atlantic University (FAU) in Boca Raton, Florida, to the investment community. The presentation conducted by Mr. Mark Walker, CEO, and Diana Diaz, CFO, highlighted the company’s favorable growth trends and dynamic value proposition. In our view, the company is well positioned to execute its favorable growth initiatives.

Favorable growth trends. The company grew Q3 revenue by an impressive 125.5%, from the prior year period. The strong performance was attributed to the firm’s sell-side programmatic advertising business. Notably, the number of sell-side customers stayed relatively stable, and ad spend per customer increased significantly.  


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*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. 

Release – Lee Enterprises plans quarterly call and webcast December 7, 2023

Research News and Market Data on LEE

December 1, 2023

DAVENPORT, Iowa, Dec. 01, 2023 (GLOBE NEWSWIRE) — Lee Enterprises, Incorporated (NASDAQ: LEE), a major subscription and advertising platform and a leading provider of high quality, trusted, local news and information in 75 markets, has scheduled an audio webcast and conference call for Thursday, December 7, 2023, at 9 a.m. Central Time. Lee plans to issue a news release before market opens that day with preliminary results for its year ended September 24, 2023.

A live webcast of the conference call may be accessed via the Investor Relations portion of Lee’s website or here and will be available for replay 24 hours later.

ABOUT LEE

Lee Enterprises is a major subscription and advertising platform and a leading provider of local news and information with daily newspapers, rapidly growing digital products and, nearly 350 weekly and specialty publications serving 75 markets in 26 states. Lee’s newspapers have average daily circulation of 1.0 million, and reach more than 31 million digital unique visitors. Lee’s markets include St. Louis, MO; Buffalo, NY; Omaha, NE; Richmond, VA; Lincoln, NE; Madison, WI; Davenport, IA; and Tucson, AZ. Lee Common Stock is traded on the NASDAQ under the symbol LEE. For more information about Lee, please visit www.lee.net.

Contact:
IR@lee.net
(563) 383-2100

Source: Lee Enterprises Inc.

Release – Direct Digital Holdings to Participate in the Noble Capital Markets 19th Annual Emerging Growth Equity Conference

Research News and Market Data on DRCT

November 20, 2023 9:00am EST

HOUSTON, Nov. 20, 2023 /PRNewswire/ — Direct Digital Holdings, Inc. (Nasdaq: DRCT) (“Direct Digital Holdings” or the “Company”), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC (“Colossus SSP”), Huddled Masses LLC (“Huddled Masses”) and Orange142, LLC (“Orange142”), today announced that management will participate in the Noble Capital Markets 19th Annual Emerging Growth Equity Conference on December 3-5, 2023 at Florida Atlantic University in Boca Raton, FL.

The conference will consist of one-on-one and small group meetings providing investors the opportunity to hear from and meet with Direct Digital Holdings’ management team. For more information, or to schedule a meeting with management, please contact your Noble representative.

About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled Masses, and Orange 142, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The Company’s subsidiaries Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Year-to-date, Direct Digital Holdings’ sell- and buy-side solutions have managed on average over 125,000 clients monthly, generating over 300 billion impressions per month across display, CTV, in-app and other media channels.

Contacts:
Investors:
Brett Milotte, ICR
Brett.Milotte@icrinc.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/direct-digital-holdings-to-participate-in-the-noble-capital-markets-19th-annual-emerging-growth-equity-conference-301993511.html

SOURCE

Released November 20, 2023

Release – QuoteMedia Announces 8% (10% FXN) Revenue Growth for Q3 2023

Research News and Market Data on QMCI

PHOENIX, Nov. 13, 2023 (GLOBE NEWSWIRE) — QuoteMedia, Inc. (OTCQB: QMCI), a leading provider of market data and financial applications, announced financial results for the quarter ended September 30, 2023.

QuoteMedia provides banks, brokerage firms, private equity firms, financial planners and sophisticated investors with a more economical, higher quality alternative source of stock market data and related research information. We compete with several larger legacy organizations and a modest community of other smaller companies. QuoteMedia provides comprehensive market data services, including streaming data feeds, on-demand request-based data (XML/JSON), analytics and research, trade integration, web content solutions (financial content for website integration) and applications such as Quotestream Professional and Quotestream Web Trader.

Highlights for Q3 2023 include the following:

  • Quarterly revenue increased by 8% to $4,762,442 in Q3 2023 from $4,390,667 in Q3 2022, an increase of $371,775.
  • On an FX-neutral basis (FXN), revenue growth for Q3 2023 vs Q3 2022 was 10% (1) .
  • Adjusted EBITDA for Q3 2023 was $719,547 compared to $670,145 in Q3 2022, an improvement of $49,402 (7%) (1) .
  • Deferred revenue was $2,049,664 at September 30, 2023. This is an $882,816 (76%) increase from the $1,166,848 deferred revenue balance at December 31, 2023.

“This has been another good quarter for QuoteMedia,” said Robert J. Thompson, Chairman of the Board. “We have closed and launched important new clients, and completed substantial product development, all of which will lead to continuing revenue growth. Additionally, we have a healthy sales pipeline and are continuing exploratory discussions with several large firms about major deployments. We are now enjoying increasing market penetration as our successes over past periods are gaining notice throughout the industry.”

QuoteMedia will host a conference call Tuesday, November 14, 2023 at 2:00 PM Eastern Time to discuss the Q3 2023 financial results and provide a business update.

Conference Call Details:

Date: November 14, 2023

Time: 2:00 PM Eastern

Dial-in numbers: 800-343-4136; 203-518-9814

Conference ID: QUOTEMEDIA

An audio rebroadcast of the call will be available later at: www.quotemedia.com

About QuoteMedia

QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Bank of Montreal (BMO), Broadridge Financial Systems, JPMorgan Chase, Scotiabank, CI Financial, Canaccord Genuity Corp., Hilltop Securities, Avantax, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, The Goldman Sachs Group, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Credential Qtrade Securities, CNW Group, iA Private Wealth, Ally Invest, Inc., Suncor, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Equisolve, Stock-Trak, Mergent, Cision and others. Quotestream®, QMod TM and Quotestream Connect TM are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com .

Statements about QuoteMedia’s future expectations, including future revenue, earnings, and transactions, as well as all other statements in this press release other than historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. QuoteMedia intends that such forward-looking statements be subject to the safe harbors created thereby. These statements involve risks and uncertainties that are identified from time to time in the Company’s SEC reports and filings and are subject to change at any time. QuoteMedia’s actual results and other corporate developments could differ materially from that which has been anticipated in such statements.

QuoteMedia Investor Relations

Brendan Hopkins
Email: investors@quotemedia.com
Call: (407) 645-5295

Note 1 on Non-GAAP Financial Measures

We believe that Adjusted EBITDA, as a non-GAAP pro forma financial measure, provides meaningful information to investors in terms of enhancing their understanding of our operating performance and results, as it allows investors to more easily compare our financial performance on a consistent basis compared to the prior year periods. This non-GAAP financial measure also corresponds with the way we expect investment analysts to evaluate and compare our results. Any non-GAAP pro forma financial measures should be considered only as supplements to, and not as substitutes for or in isolation from, or superior to, our other measures of financial information prepared in accordance with GAAP, such as net income attributable to QuoteMedia, Inc.

We define and calculate Adjusted EBITDA as net income attributable to QuoteMedia, Inc., plus: 1) depreciation and amortization, 2) stock compensation expense, 3) interest expense, 4) foreign exchange loss (or minus a foreign exchange gain), and 5) income tax expense. We disclose Adjusted EBITDA because we believe it is a useful metric by which to compare the performance of our business from period to period. We understand that measures similar to Adjusted EBITDA are broadly used by analysts, rating agencies, investors and financial institutions in assessing our performance. Accordingly, we believe that the presentation of Adjusted EBITDA provides useful information to investors. The table below provides a reconciliation of Adjusted EBITDA to net income attributable to QuoteMedia, Inc., the most directly comparable GAAP financial measure.

QuoteMedia, Inc. Adjusted EBITDA Reconciliation to Net Income:

Three-months ended September 30,20232022
Net income$126,036$309,543
Depreciation and amortization672,588545,076
Stock-based compensation(57,188)(82,888)
Interest income, net(825)(10)
Foreign exchange gain(21,803)(102,327)
Income tax expense739751
Adjusted EBITDA$719,547$670,145

In addition to the non-GAAP measures discussed above, we also analyze certain measures, including net revenues and operating expenses, on an FX-neutral basis to better measure the comparability of operating results between periods. Management believes that changes in foreign currency exchange rates are not indicative of the company’s operations and evaluating growth in net revenues and operating expenses on an FX-neutral basis provides an additional meaningful and comparable assessment of these measures to both management and investors. FX-neutral results are calculated by translating the current period’s local currency results with the prior period’s exchange rate. FX-neutral growth rates are calculated by comparing the current period’s FX-neutral results by the prior period’s results.

News Provided by GlobeNewswire via QuoteMedia