It is — the beta of 2.5 means it’s more than twice as bipolar as the broader market.
Still, Cumulus is up 65% during the past year, beating the S&P 500 by more than 50 percentage points. And hey, it is on track to return to profitability this year. Analysts forecast full-year earnings of 23 cents a share vs. a year-ago loss of 50 cents.
However, the stock-price appreciation might have gotten ahead of this turnaround story. The forward P/E of 11 sure looks cheap, and it’s in line with its own five-year average.
But with a long-term growth rate of -1%? Well, be forewarned that this stock could also be cheap for a reason.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.