Is CuriosityStream (streaming platform) grossly undervalued at $550M with already 13M paying subscribers?

by bearsgotoalaskanstfu

The streaming industry is getting a lot of exposure lately with all the news from Disney+ and HBO max. Looking for a pure play in the streaming service I came across CuriosityStream. Basically the platform offers documentaries about science, history, politics, etc… and they have over 3000+ titles in the platform. The founder is John Hendricks, founder and former chairman of Discovery.

After digging a little bit I was surprised to see that despite having 13M subscribers total revenue for Q3 was only $8.9M, giving an ARPU of only $0.15 which seems ridiculous for the amount of value you are getting. It seems like a good amount of the subscriber base comes from bundled packages at a heavy discount. They are looking for exposure while growing at all costs. Here are some key point:

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  • The company has no debt and $180M cash in the balance sheet.
  • The company went from 2M bundled subscriptions in Q1 2019 to 13M in Q3 2020
  • Over 60% gross margin
  • They project 10x growth by 2025 with $400M in revenues

Giving the uncertainty of the current market environment it seems pretty safe to buy something that sells $1 a month subscriptions and is disrupting an industry, targeting a more sophisticated customers instead of the average becky who likes stranger things. The last time John Hendricks created something (Discovery) he turned a $5M investment into a $32B company before stepping down and creating CuriosityStream.

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I would like to hear your thoughts on the comment section and discuss if in fact CuriosityStream is already fairly valued, undervalued or maybe overvalued.

Side note: John Hendricks has been buying shares this month increasing his position by 21%.

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.

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