Thunderbird Entertainment Group Inc (CVE:TBRD) (OTCQX:THBRF) (FRA:32GA) got a price target bump from analysts at Canaccord Genuity Capital Markets following the company’s fiscal second-quarter results.
The Canadian broker's analysts raised Thunderbird's target price to $5.00 from $3.25 and repeated a Buy rating on the stock.
In a note to clients, analysts Aravinda Galappatthige and Matthew Lee noted that the media company’s C$28 million in quarterly revenue was “well ahead” of their own C$19.3 million forecast - the fourth straight quarter Thunderbird has beaten expectations and by its largest margin yet. EPS was C$0.03, also ahead of Canaccord’s forecast.
READ: Thunderbird Entertainment doubles up fiscal 2Q revenue, thanks to growing Kids and Family Division, Atomic Cartoons
“Thunderbird has a very deep pipeline,” the analysts wrote. “In our view, the results over the last four quarters highlight the solid underlying funnel of production opportunities at TBRD, and the company’s growing profile in the industry."
"We believe the company is seeing particular success with some of its key kids franchises including Last Kids on Earth (for Netflix), Hello Ninja (Netflix) as well as some of the service work being done on The Lego Star Wars specials for Disney+ and Trolls: Trollstopia for Peacock,” they added.
The Canaccord analysts are optimistic about Thunderbird’s ability to drive merchandising revenue, including from a Last Kids on Earth toy line expected to launch in March.
“With TBRD’s kids franchises rapidly gaining traction, we believe that the company has the potential to drive additional growth from the development of merchandise and from ancillary products such as video games,” the analysts said. “On that note, the company announced the video game release under this brand which will be available this spring. While this segment is in its early stages, we expect it to be a key tenet of longer-term growth for the firm.”
Thunderbird is also set up well for potential acquisitions, they added.
“The company’s net cash position stood at $18 million as of Q2/21, which we believe could be used toward making acquisitions to spur further growth,” the analysts noted. “In particular, we believe the company is looking at the potential for international expansion, which we view as prudent given the demand from streaming platforms.”
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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