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Sunday, September 24, 2023

Chicken Soup for the Soul (CSSE) Reports Q1 Loss, Revenue Misses Expectations


Chicken Soup for the Soul Entertainment, Inc. (CSSE) reported a quarterly loss of $2.76 per share, compared with the Zacks Consensus Estimate for a loss of $1.66 per share. This compares to a loss of $0.92 per share a year ago. These figures are adjusted for non-recurring items.

The reported earnings surprise for the quarter was -66.27%. A quarter ago, it was expected that the company would post a loss of $1.26 per share when it actually delivered a loss of $2.70, delivering a surprise of -114.29%.

The company has missed consensus earnings per share estimates for the past four quarters.

Chicken Soup for Soul Entertainment, which belongs to the Zacks Broadcast Radio and Television industry, reported revenue of $109.6 million for the quarter ended March 2023, missing the Zacks Consensus Estimate by 0.77%. This compares with revenue of $29.21 million in the same period last year. The company has beaten consensus revenue estimates three times in the past four quarters.

The sustainability of the stock’s immediate price action based on recently released data and future earnings expectations will largely depend on management’s commentary on the earnings call.

Shares of Chicken Soup for the Soul Entertainment, Inc. have lost about 72.9% since the start of the year, while the S&P 500 has gained 7.4%.

What’s next for Chicken Soup for the Soul Entertainment

While Chicken Soup for the Soul has underperformed the broader market so far this year, the question on investors’ minds is: What’s next for the stock?

There are no easy answers to this critical question, but one reliable indicator that can help investors answer this question is a company’s earnings outlook. This includes not only current consensus earnings expectations for the next few quarters, but also recent changes in those expectations.

Empirical studies have shown a strong correlation between recent stock movements and trends in earnings estimate revisions. Investors can track such revisions on their own, or rely on a tried-and-true rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Soul Entertainment was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, expect the stock to align with the market in the near future. You can view the full list of Zacks #1 (Strong Buy) stocks here.

It will be interesting to see how estimates for future quarters and the current fiscal year change in the coming days. The current consensus EPS is -$1.22 on $121.23 million in revenue for the next quarter and -$2.85 in the current fiscal year on $498.17 million in revenue.

Investors should note that the industry’s outlook can also have a significant impact on a stock’s performance. In terms of the Zacks Industry Rank, Broadcast Television is currently in the bottom 31% of the 250 plus Zacks industries. Our research shows that the Zacks Rank 50% of industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the broader Zacks Consumer Discretionary sector, iMedia Brands (IMBI ) has yet to report results for the quarter ended April 2023.

The home shopping company is expected to post a quarterly loss of $0.68 per share in its upcoming report, representing a year-over-year change of -58.1%. The consensus EPS estimate for the quarter has been revised down 236.4% to current levels over the past 30 days.

Revenue for iMedia Brands is expected to be $104.77 million, down 32.2% year-over-year.

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