Skip to main content

NEW YORK (TheStreet) -- Cinedigm  (CIDM) - Get Cinedigm Corp Report was falling 6.14% to $2.75 on Friday after the content distributor announced its third-quarter results.

The company posted a loss of five cents a share for the quarter that ended on Dec. 31, which narrowly surpassed the consensus estimate by three cents. Revenue for the quarter totaled $34.9 million, which was less than the consensus estimate of $37.36 million.

Cinedigm also adjusted its fourth-quarter guidance to reflect the effect of its revenue recognition. The company now expects EBIDTA between $17 million and $18.5 million with total revenue between $35 million and $37 million.

The company announced on Wednesday that it had teamed with convention organizer Wizard World to start a Comic Con channel.

TheStreet Recommends

Must Read: Cinedigm Announces Third Quarter Fiscal 2014 Financial Results

TheStreet Ratings team rates CINEDIGM CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate CINEDIGM CORP (CIDM) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, weak operating cash flow and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 97.9% when compared to the same quarter one year ago, falling from -$2.61 million to -$5.17 million.
  • Net operating cash flow has decreased to $7.28 million or 45.07% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • CINEDIGM CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CINEDIGM CORP reported poor results of -$0.44 versus -$0.39 in the prior year. This year, the market expects an improvement in earnings (-$0.23 versus -$0.44).
  • CIDM, with its decline in revenue, underperformed when compared the industry average of 10.9%. Since the same quarter one year prior, revenues slightly dropped by 9.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for CINEDIGM CORP is currently very high, coming in at 75.21%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, CIDM's net profit margin of -25.36% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: CIDM Ratings Report