Curiositystream (CURI) is a streaming company that not a lot of people know about, however, it actually provides a lot of quality content at a bargain price. Unlike most streaming services such as Netflix (NFLX), Curiositystream focuses only on providing documentaries. This niche market is relatively untouched by other streaming giants which gives Curiositystream an edge in this space. The company is growing rapidly and presents a great opportunity for investors.
Curiositystream is founded in 2015 by John Hendricks, the founder and former Chairman of Discovery Communications, the global media parent company of Discovery Channel. Their streaming service adds new binge-worthy films and series each week ranging from topics such as space to geology to biology. Their focus on the documentary landscape with premium factual content has been successful so far and the trend is acting as a tailwind for the company.
The company’s third-quarter reported revenue of $18.7 million, up 114% year-over-year. Total paying subscribers grew 43% to approximately 20 million at the end of the third quarter of 2021, compared to approximately 15 million in the third quarter of 2020. The company’s market cap is only around $400 million but it already has 20 million paying subscribers which is very impressive. The subscription price of $2.99 per month and $19.99 per month is very competitive compare to $13.99 per month for Netflix’s standard plan. Besides the revenue from subscriptions, they also sell their rights for certain documentaries to other streaming services. The company is still not profitable yet but it is in hyper-growth mode. Their revenue guidance is guiding a revenue growth of a whopping 80% year over year. Analysts also forecast Curiositystream to grow around 50% CAGR from 2021 to 2026 with the company being profitable in 2024.
As of the time of writing, the company is trading at an fwd 22 price to sales ratio of 3.3 which is really cheap considering its growth rate, the company’s margin is also very healthy at around 60%, and with its subscription model, it is likely that they can maintain growth and margin at the same time. There are risks that other streaming services will start focusing more on documentaries but I don’t see that happening because the cost of producing is too high yet the market is not that huge so it is easier for companies such as Netflix to just buy certain documentaries from Curiositystream. Considering the high growth rate in the coming years with limited downside due to its stable business model and a compelling valuation, this company presents a great opportunity for investors.
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