Paramount Continues to Be America's Weakest Media Company

Paramount Global (NASDAQ: PARA) revenue did not move last quarter. Its stock trades near its 52-week low, and its streaming subscriber base is among the lowest in the industry. The company barely continues to be in the top tier of America’s media elite.

In the most recently reported quarter, Paramount had revenue of $7.3 billion, down by 1%. Earnings dropped a breathtaking 59% to $0.58 per share. Its stock trades at just over $25, perilously close to its 52-week low, and down from a 52-week high of $44.23.

Among the reasons Paramount is in such trouble is that its streaming business is too small. Streaming subscribers numbered 62 million at the end of last quarter, up 10%. That puts it behind Netflix, Amazon Prime, Disney+ and HBO Max. It is less than half the size of the first three companies on this list. It also has to compete with Apple TV+. Of all the streaming services, it has the largest potential budget to grow because of Apple’s balance sheet, its installed base of hardware products and its brand.

Paramount has a problem looming in its future. Advertising revenue is generally hurt by a recession, and one has either started or will soon. The company’s CBS revenue is threatened in particular.

Finally, Paramount’s movie studio business is of only modest size and will struggle long term to keep up with its peers.

For each of these reasons, Paramount’s stock will continue in the wrong direction.

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