Genius Brands (NASDAQ:GNUS) Stock Continues to Gain Momentum: What Next?
4:14 pm Monday, June 07th, 2021
The Genius Brands (NASDAQ:GNUS) stock had been flying high last year at this time last year. Back on June 4, 2020 the Genius Brands that stock had hit a high of as much as $11.73 a share. However, this past Friday, the situation was completely different as the stock ended the day at $1.80 a share, which represents a decline of 85% in a year.
In recent times, there might have been some optimistic sentiments regarding Genius Brands due to the success of some of its shows on its streaming platform. However, it might be a good idea for investors to take a closer look at the company before making any kind of move.
The company is involved in producing and licensing content that is meant for kids’ entertainment. In addition to that, the company has its own channel named Kartoon Channel!, which has been available to more than 100 million households in the United States through a variety of distribution platforms.
That being said, it is also important to point out that some experts believe that the stock is currently overvalued and not a particularly great investment. In the first fiscal quarter of 2021, the company managed to generate revenues of $1.1 million.
If that figure is annualised, then it works out to revenues of $4.4 million. However, at this point, the company commands a market capitalisation of as much as $541 million. That implies that the Genius Brands stock is currently trading at a multiple of 122.9 when compare to its revenues for the fiscal year of 2021. That is a pretty expensive valuation and it is even more galling considering the fact that the stock has had a massive correction in recent times.
Moreover, the Genius Brands management has now actually provided any projections with regards to its revenues. Hence, even though the company might have a compelling business, the cash burn and possibility of diluting the stock might have an ill effect on the stock.
