Stingray Group Inc. (TSE: RAY.A) has reported slightly disappointing results for the first quarter of Fiscal 2023. The company’s earnings and revenues missed analysts’ estimates but rose year-over-year. Shares of the company were up 2.8% on August 2.
What Does Stingray Group Do?
With over 1,000 employees across the globe and 400 million subscribers in 160 countries, Stingray is a global music, media, and technology company. The Montreal-based company provides curated direct-to-consumer and B2B services, including audio television channels, over 100 radio stations, SVOD content, 4K UHD television channels, FAST channels, karaoke products, digital signage, in-store music, and music apps.
Highlights of Stingray’s Q1 Results
The media and entertainment company’s adjusted earnings rose to 19 cents per share in the first quarter from 16 cents per share in the year-ago period. The metric nominally missed analysts’ estimates of 20 cents per share.
Stingray’s revenues for the reported quarter came in at $78.14 million, up 21.6% from the year-ago period. The figure lagged the Street’s estimate of $79.99 million. The upside in the revenues was largely driven by the InStore Audio Network (ISAN) acquisition and enhanced Radio sales.
The company witnessed a 31.7% year-over-year rise in its Broadcasting and Commercial Music revenues to $46.2 million in the reported quarter. Streamed hours surged 86% year-over-year to 12 million hours in the June quarter.
On June 2, 2022, Stingray completely integrated InStore Audio Network into its offering. Combining the U.S. and Canadian operations together, the entity has been named Stingray Advertising.
Stingray’s subscriber count rose 27.6% year-over-year to 730,000 at the end of the June quarter in the SVOD (subscription video-on-demand) space.
Radio revenues rose 9.5% year-over-year to $32 million in the first quarter of Fiscal 2023, driven by easing COVID-19 restrictions.
Geographically, revenues in Canada jumped 12.9% over the prior year to $46.6 million in the reported quarter. The upside has been triggered by rising Radio revenues and growing equipment and installation sales related to digital signage.
United States revenues were up 94.6% to $19.1 million in the June quarter, largely driven by InStore Audio Network buyout and growing subscription revenues.
Meanwhile, there was a 5.5% fall in revenues from other countries to $12.4 million in the first quarter of Fiscal 2023.
The company declared a dividend of $0.075 per subordinate voting share, variable subordinate voting share, and multiple voting share on August 2, 2022. The dividend payout will be made to shareholders on record as of August 31, 2022, on, or around, September 15, 2022.
Street Has a Strong Buy Rating on RAY.A Stock
Overall, the Street is optimistic about Stingray and has a Strong Buy consensus rating based on five Buys. Shares of the company have lost 7.4% so far this year.
Last month, Drew McReynolds of RBC Capital reiterated a Buy rating on the stock with a price target of C$8 (29.7% upside potential).
RAY.A scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Key Takeaway for Stingray Investors
The media and entertainment company is seeing an improving business environment on the back of the easing of COVID-19 restrictions and economic activities gaining pace. Further, the growing synergies from the InStore Audio Network (ISAN) acquisition should bode well for the stock.
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