IHRT Weathers Covid, But Will Return in Q3/Q4
FOR EDUCATIONAL PURPOSES ONLY. INVESTING IS HIGH-RISK (ESPECIALLY RIGHT NOW).
IHRT comes out of May 2019 bankruptcy and looks healthy: The company became profitable, flipped negative shareholder equity to positive, and it's currently trading at ~76.5% below analysts' fair market value ($30.28); Nearly all ratings are STRONG BUY. Healthy price-to-book ratio coming out of bankruptcy with forecast earnings to grow steadily through end of 2020 into 2024. Three-year ROE is forecast to be 10.4%. Debt to equity has strongly consolidated. Company leadership is taking a strong lead against Covid-19 by reducing executive salaries and temporarily furloughing employees. There is nothing uniquely threatening to the radio firm, and its industry is comparatively well-insulated against the pandemic. IHRT continues to perform and draw a larger audience with popular performers and digital events. IHRT's viewership is growing during this situation, and bar any other "unique disasters", there is no reason why IHRT will not rebound quickly in Q3/Q4. CEO Pittman says the company's originally forecasted expenses for 2020 centered heavily on real estate investment (440M-50m) as the firm looks to consolidate stations for radio broadcast. Most analysts agree the pandemic will crash the real estate market to some degree (especially commercial space) and it already has, providing potential opportunity for IHRT to affect its infrastructural planning with reduced expenses. As the pandemic takes hold and forecasts point to a months-long quarantine, podcasting also gets a boon. IHRT has taken a proactive approach to sponsoring and incorporating podcast media into its portfolio. Currently, IHRT supports around 1 million podcast shows. Nationally, podcast shows are up 27% from 2019. IHRT looks to stay in a holding pattern for the next 8-12 weeks while the U.S. tackles Covid-19. Strong support has been found above the $7.30 level. IMPORTANTLY, Covid-19 is violent and fast. If epidemiologists' models play out and trials also fail to identify a novel treatment within the next four weeks during the forecasted "viral peak", we could see a fall below the current support. Nonetheless, barring a market-wide crash, there is no reason why IHRT can't meet its pre-pandemic 30-day moving average of close to $18 by Q3/Q4.
IHRT comes out of May 2019 bankruptcy and looks healthy: The company became profitable, flipped negative shareholder equity to positive, and it's currently trading at ~76.5% below analysts' fair market value ($30.28); Nearly all ratings are STRONG BUY. Healthy price-to-book ratio coming out of bankruptcy with forecast earnings to grow steadily through end of 2020 into 2024. Three-year ROE is forecast to be 10.4%. Debt to equity has strongly consolidated. Company leadership is taking a strong lead against Covid-19 by reducing executive salaries and temporarily furloughing employees. There is nothing uniquely threatening to the radio firm, and its industry is comparatively well-insulated against the pandemic. IHRT continues to perform and draw a larger audience with popular performers and digital events. IHRT's viewership is growing during this situation, and bar any other "unique disasters", there is no reason why IHRT will not rebound quickly in Q3/Q4. CEO Pittman says the company's originally forecasted expenses for 2020 centered heavily on real estate investment (440M-50m) as the firm looks to consolidate stations for radio broadcast. Most analysts agree the pandemic will crash the real estate market to some degree (especially commercial space) and it already has, providing potential opportunity for IHRT to affect its infrastructural planning with reduced expenses. As the pandemic takes hold and forecasts point to a months-long quarantine, podcasting also gets a boon. IHRT has taken a proactive approach to sponsoring and incorporating podcast media into its portfolio. Currently, IHRT supports around 1 million podcast shows. Nationally, podcast shows are up 27% from 2019. IHRT looks to stay in a holding pattern for the next 8-12 weeks while the U.S. tackles Covid-19. Strong support has been found above the $7.30 level. IMPORTANTLY, Covid-19 is violent and fast. If epidemiologists' models play out and trials also fail to identify a novel treatment within the next four weeks during the forecasted "viral peak", we could see a fall below the current support. Nonetheless, barring a market-wide crash, there is no reason why IHRT can't meet its pre-pandemic 30-day moving average of close to $18 by Q3/Q4.
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