Cinedigm Stock Remains Cheap Despite the Company’s Rapid Growth


If you’re looking to invest in the streaming revolution, you should definitely like this name. Cinedigm (NASDAQ:CIDM) bills itself as a company that “powers custom content solutions to the world’s largest retail, media and technology companies.” That’s ambitious, yet CIDM stock remains quite affordable.

Image of Cinedigm (CIDM) logo in a black web browser, amplified by a magnifying glass.
Source: Pavel Kapysh /

You’ve seen me recommend ground-floor opportunities before — stocks that most people haven’t heard about yet but that could become famous (and much more expensive) in the future.

As I see it, low-priced stocks can be tremendous wealth builders if you invest in the right companies and the right sectors. To that end, streaming is a sector that’s absolutely in growth mode.

But don’t just take my word for it. Let’s dig up some data on this up-and-coming streaming company and see if we can build a case in favor of Cinedigm.

CIDM Stock at a Glance

Technically speaking, CIDM is classified as a penny stock. The U.S. Securities and Exchange Commission (SEC) defines this as a stock that trades under $5 per share. Today, Cinedigm trades at $1.29.

This means a couple of things for investors. First, the stock is affordable for practically any account size. But, penny stocks can also be volatile. Hence, they’re generally not suitable for large position sizes.

At the end of 2020, CIDM stock was trading at 64 cents. But the new year started off quite well for the bulls, with the stock price reaching a short-term peak of around $2.33 on Feb. 9.

So, as you can see, this stock is capable of moving higher very quickly. In that case, the best strategy could be to catch the stock when it swings low. With CIDM stock priced a little above $1 today, you might have a chance to start accumulating the shares with a profit target of $2 or higher.

Impressive Fiscal Results

Some folks might assume that an inexpensive stock automatically means that the company isn’t doing well. That generalization simply isn’t true, however. When it comes to Cinedigm, it’s a textbook example of a company with a cheap stock price but also an excellent fiscal profile.

As evidence of this, we can examine the company’s data from the third quarter of fiscal 2021. These stats should change some skeptics’ minds:

  • Consolidated revenues of $10 million
  • Streaming channel revenues up 85% year-over-year (YOY)
  • “Ad-supported streaming channel revenues increased 79% sequentially over the prior quarter and 150% over the prior year quarter”
  • “Streaming digital content licensing and sales increased by 34% year-over-year”
  • Combined over-the-top (OTT) streaming and digital revenues increased by 36% versus the prior quarter and by 58% YOY

A Whole Lot of Growth

Cinedigm has more going for it than that revenue growth, though. For example, the company recorded 907 million streaming minutes during the quarter. That marked “a new company record […] up 391% versus the prior year quarter.” So, clearly the company is growing in more ways than one.

On top of all that, Cinedigm has also expanded its streaming catalog by acquiring Fandor. Its press release describes Fandor as “the leading global independent film subscription streaming service with the largest collection of independent films, documentaries, and international features in the market.”

According to the release, the worldwide market for independent films is valued at $4.8 billion. Fandor has a vast catalog of more than 4,600 film titles, so the acquisition could provide Cinedigm with a significant revenue stream. Cinedigm’s Chairman and CEO, Chris McGurk, noted that the Fandor buyout “solidifies Cinedigm’s position as the leading global streaming company for independent films.”

Moreover, McGurk expects “an immediate EBITDA uplift from Fandor and strong revenue and profit growth going forward.” That can only mean good things for CIDM stock.

The Takeaway

We’ve seen clear evidence that Cinedigm is moving on the right track. In Q3, its revenue growth was solid. Furthermore, the Fandor acquisition should help bolster Cinedigm’s revenues going forward.

So, with that in mind, it’s fair to conclude that CIDM stock might not be cheap for too much longer.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed 

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.

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