The Arena Group (AREN) AI Stock Analysis

• Market Cap: $207.43M
• Dividend Yield: N/A
• Average Volume (3M): 267.09K
• Price to Earnings (P/E): 1.7
• Beta (1Y): -0.22
• Revenue Growth: -22.89%
• EPS Growth: N/A
• Country: US
• Employees: 190
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 0.26
• Shares Outstanding: 47,465,748
• 10 Day Avg. Volume: 195,747
• 30 Day Avg. Volume: 267,092
• PEG Ratio: -0.03
• Price to Book (P/B): -0.36
• Price to Sales (P/S): 0.38
• P/FCF Ratio: -2.94
• Enterprise Value/Market Cap: 1.95
• Enterprise Value/Revenue: 2.76
• Enterprise Value/Gross Profit: 5.24
• Enterprise Value/Ebitda: 7.96
• 1Y Price Target: $12.00
• Price Target Upside: 174.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 44 Neutral
• Price Target: $4.50 ▲(2.97% Upside)

The overall stock score of 44 reflects significant financial challenges, including high leverage and cash flow issues, despite some positive revenue trends. Technical analysis indicates bearish momentum, while the low P/E ratio suggests potential undervaluation. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Revenue Growth

The positive revenue growth indicates a recovery from previous declines, suggesting the company is successfully expanding its market presence and product offerings.

Operational Margins

Improved gross profit margins reflect better cost management and operational efficiency, which can enhance long-term profitability and competitiveness.

Digital Advertising Revenue

A strong focus on digital advertising provides a scalable revenue stream, leveraging the company's digital platforms and content to attract advertisers.

Negative Factors

High Leverage

High leverage increases financial risk and limits flexibility, potentially affecting the company's ability to invest in growth opportunities and withstand economic downturns.

Cash Flow Challenges

Significant decline in free cash flow growth indicates liquidity concerns, which could hinder the company's ability to fund operations and invest in future growth.

Negative Stockholders' Equity

Negative stockholders' equity highlights financial instability, posing a risk to long-term sustainability and necessitating restructuring to improve financial health.

The Arena Group Business Overview & Revenue Model

Company Description

The Arena Group Holdings, Inc., together with its subsidiaries, operates digital media platform the United States and internationally. The company offers the Platform, a proprietary online publishing platform comprising publishing tools, video platforms, social distribution channels, newsletter technology, machine learning content recommendations, notifications, and other technology. The company was formerly known as TheMaven, Inc. and changed its name to The Arena Group Holdings, Inc. in February 2022. The Arena Group Holdings, Inc. was incorporated in 1990 and is based in New York, New York.

How the Company Makes Money

The Arena Group generates revenue through multiple channels, primarily including digital advertising, subscription services, and content licensing. Digital advertising forms a significant portion of its earnings, with the company offering targeted ad placements on its various platforms. Subscription services provide a steady income stream, as users pay for premium content and access to exclusive features. Additionally, the company generates revenue through licensing agreements, allowing third parties to utilize its content across different mediums. Strategic partnerships with brands and advertisers further enhance its revenue potential, as the company collaborates on marketing campaigns and sponsored content initiatives.

The Arena Group Financial Statement Overview

Summary

The Arena Group shows signs of financial recovery with improved profitability margins and a positive net income in the TTM. However, high leverage, negative equity, and ongoing negative cash flows present significant risks. The company needs to focus on reducing debt and improving cash flow stability to enhance its financial health.

Income Statement

The Arena Group's income statement shows moderate improvement in profitability and revenue growth. The TTM Gross Profit Margin improved to 48.5%, indicating efficient cost management. The Net Profit Margin turned positive at 5.2%, a significant improvement from prior losses. However, the Revenue Growth Rate was a negative 48.1% compared to 2023, and the EBITDA Margin increased to 18.9%, signaling improved operational efficiency. Despite these improvements, historical volatility and prior year losses impact the overall score.

Balance Sheet

The balance sheet reflects a challenging financial position with a high Debt-to-Equity Ratio due to negative equity, indicating significant leverage. Stockholders' Equity remains negative at -$125.9 million, which is a concern for financial stability. The Equity Ratio is also negative, reflecting a high-risk financial structure. While there has been some reduction in total debt, the overall leverage and negative equity severely impact the score.

Cash Flow

The cash flow analysis shows improvement in managing negative cash flows. The Operating Cash Flow to Net Income Ratio is negative due to negative operating cash flow, indicating ongoing cash management challenges. The Free Cash Flow improved slightly but remains negative at -$14.9 million. Despite some positive trends in financing activities, the persistent negative free cash flow affects the overall cash flow score.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	146.61M	125.91M	143.63M	220.94M	189.14M	128.03M
Gross Profit	77.17M	55.72M	101.96M	88.01M	78.16M	24.97M
EBITDA	50.76M	16.94M	-3.58M	-29.91M	-55.98M	-47.69M
Net Income	123.49M	-100.71M	-55.58M	-70.86M	-89.94M	-89.23M
Balance Sheet
Total Assets	127.78M	116.35M	188.88M	203.72M	173.98M	214.20M
Cash, Cash Equivalents and Short-Term Investments	6.77M	4.36M	9.28M	13.87M	9.35M	9.03M
Total Debt	115.49M	123.69M	131.49M	116.85M	83.26M	90.32M
Total Liabilities	145.11M	246.68M	247.87M	255.87M	225.66M	216.10M
Stockholders Equity	-17.33M	-130.33M	-58.99M	-52.15M	-51.68M	-1.90M
Cash Flow
Free Cash Flow	-608.00K	-16.13M	-28.55M	-17.01M	-19.92M	-37.26M
Operating Cash Flow	3.06M	-16.08M	-24.77M	-11.30M	-14.73M	-32.29M
Investing Cash Flow	-7.21M	-5.17M	-3.21M	-38.59M	-13.15M	-4.93M
Financing Cash Flow	4.84M	16.33M	22.89M	54.42M	28.19M	37.28M

The Arena Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AREN, the sentiment is Negative. The current price of 4.37 is below the 20-day moving average (MA) of 5.33, below the 50-day MA of 5.90, and above the 200-day MA of 4.27, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 33.32 is Neutral, neither overbought nor oversold. The STOCH value of 20.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AREN.

The Arena Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
SCOR	57 Neutral	$38.96M	―	-33.83%	―	-0.06%	-87.64%
TRVG	55 Neutral	$216.55M	―	-12.44%	―	8.29%	87.33%
AREN	44 Neutral	$207.43M	1.67	82.40%	―	-22.89%	―
SEAT	43 Neutral	$110.02M	25.25	-75.68%	―	-10.52%	-420.74%
BODI	42 Neutral	$36.61M	―	-133.94%	―	-31.96%	56.06%
BZFD	41 Neutral	$59.63M	―	-28.67%	―	―	―