Thunderbird Entertainment Group Inc (TSX-V:TBRD, OTCQX:THBRF)’s very strong content production pipeline is predictive of solid revenue trends going forward said Canaccord Genuity analysts following the release of the entertainment company’s fiscal 4Q quarterly results on Thursday.
Thunderbird reported a year-over-year (y/y) 4Q consolidated revenue jump of 69%, with annual consolidated revenue for the year ended June 30, 2022, rising by 34%.
In a note to clients, Canaccord analysts wrote that the company’s fiscal 4Q topline results beat their estimates by a large margin, with revenues coming in at $44.1 million, well ahead of their $31.1 million forecast.
READ: Thunderbird Entertainment Group reports surge in revenue
“Total revenue growth of 69% y/y was driven by solid production services revenue, which rose 36% to $32.5M in Q4, well ahead of our $28.8M estimate, and sharply higher licensing and distribution revenues, which rose 445% y/y to $11.6 vs our $2.2M estimate,” the analysts wrote.
They added that Thunderbird’s strong pipeline remained a key element of the company’s investment thesis.
“During the quarter, the company had 28 programs in various stages of production, eight of which were Thunderbird IP, with the remaining 20 being service productions,” they wrote.
“TBRD’s efforts to continue to move the production mix toward proprietary is key given the higher longer-term value associated with the model and implications for valuation.”
M&A upside
Further, the analysts wrote that mergers and acquisitions remained an upside opportunity.
“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 for multicultural content that will drive subscriber growth outside of North America,” they wrote.
As such, the analysts reiterated their ‘Buy’ rating for the stock and price target of C$5.50, valuing the stock using 9.5x EV/EBITDA (2023E). Thunderbird’s TSX-V-listed shares are currently trading at about C$2.75.
Thunderbird Entertainment is a global award-winning, full-service multiplatform production, distribution and rights management company, headquartered in Vancouver, with additional offices in Los Angeles, Toronto, and Ottawa.
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