Cumulus Media Inc (NASDAQ:CMLS) Shares Experience Upside Volatility

Cumulus Media Inc (NASDAQ:CMLS)

Cumulus Media Inc (NASDAQ:CMLS) stock ended the trading day 7.0% higher after the company announced yesterday a profit $5.7 million or $0.19 per share. The normally thinly-traded stock traded at more than four times its average daily volume.

Cumulus Media Stock Chart:

About Cumulus Media Inc.

Cumulus Media Inc (NASDAQ:CMLS), headquartered in Atlanta, GA, owns and operates radio stations in the United States. The company operates under two brands, Radio Station Group and Westwood One. Revenues are generated through the sale of commercial advertising time to local, regional, and national advertisers as well as network advertising. Cumulus creates and broadcasts content through approximately 445 owned-and-operated stations in 90 United States media markets; and approximately 8,200 broadcast radio affiliates and various digital channels.

Cumulus Media Inc. Released Financials

Cumulus Media Inc (NASDAQ:CMLS) reported net revenue of $290.5 million, up 1.2% from Q2 2016. The company reported net income of $5.7 million and Adjusted EBITDA of $67.4 million – up 6.7% from the same period for 2016. For the six months ended June 30, 2017, Cumulus Media posted net revenue of 554.6 million, down 0.2% from the six months ended June 30, 2016. The company had a net loss of $1.7 million and Adjusted EBITDA of $106.1 million which was up 1.0% from the six months ended June 30, 2016.

Mary Berner, President and Chief Executive Officer of Cumulus Media Inc (NASDAQ:CMLS) said, “Our second quarter results provide further evidence of the success of our turnaround strategies as we posted a year-over-year increase in Adjusted EBITDA for the first time in over three years despite what continues to be a tough market environment.”

In early 2014, CMLS shares were trading above $60. However, they have been on a long consistent slide since then. CMLS stock is down over 57% YTD and down almost 85% for the year. Interestingly, as earnings have suffered, sales have been less volatile. In 2014 the company posted a sales figure of $1.26 million, and just two years later the posted sales figure came in at $1.14 million.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Cumulus Media Inc (NASDAQ:CMLS) Getting Dropped from Analyst’s Play Lists

Cumulus Media Inc (NASDAQ:CMLS)

Various financial media outlets have reported that shares of Cumulus Media Inc (NASDAQ:CMLS) were downgraded on Tuesday by Zack’s Investment Research. But it seems that few paid have attention to the news. CMLS shares closed Friday at $0.40; they closed Tuesday at $0.47; and they are trading around $0.57 at 2:40 PM EST. To put a pencil to paper, that gives CMLS a 42.5% return since Friday’s close and over a 20% gain since yesterday’s close. The gains come alongside heavy volumes. Today over 1.4 million shares have been exchanged, or about 1 million more than their 30-day, daily average volume.

To be fair, the downgrade may be accurate however a little late. Or maybe a lot late. At the beginning of 2013 Cumulus Media Inc (NASDAQ:CMLS) was trading under $20 but would go on to hit above $60 by the end of the year. Then the wheels came off. By the end of 2015 investors could have picked up CMLS shares for under $1.50. CMLS shares never fully recovered and now are trading closer to their 52-week low of $0.22 than they are to their 52-week high of $3.60.

Cumulus Media Inc (NASDAQ:CMLS) has a novel business model. It operates radio stations in the mid-markets and currently reaches over 240 million people every week. Cumulus’ 447 owned and operated radio stations broadcast in 90 media markets and they have over 7,500 more that are affiliated with the Cumulus/Westwood brand. Importantly, Cumulus Media Inc (NASDAQ:CMLS) is the largest country music provider in the nation through its NASH brand.

Unlike many nano-cap firms, Cumulus Media Inc (NASDAQ:CMLS) share drop was not due to shareholder dilution. In 2014 there were 28.27 million shares outstanding and by 2016 that number increased just to 29.27 million. Sales have also been relatively consistent as in each of the past five years sales figures have come in between $1.00 million and $1.26 million. What has hurt has been the earnings losses. Although a small EPS profit of $0.40 was posted in 2014, in 2015 the EPS loss was (-$18.73) and (-$17.45) in 2016. So far 2017 does not look like any help will be coming as, for Q1 2017, Cumulus Media Inc (NASDAQ:CMLS) reported net revenue of $264.0 million, down 1.7% from the three months ended March 31, 2016, net loss of $7.4 million and Adjusted EBITDA of $38.7 million, down 7.6% from the three months ended March 31, 2016. No doubt that until earnings get turned around, no analysts will be lending CMLS their stamp of approval. I think in the radio business they call this a falling star.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.