ViacomCBS (NASDAQ:VIAC) shares have been more or less flat over the past four months. Most shareholders prefer that to the weeklong bloodbath in March that saw VIAC shares plummet 55%. However, VIAC stock closed Thursday, Aug. 5 with a gain of more than 7%.
Why the big pop? The company reported its second-quarter 2021 results, beating analyst estimates for both revenue and earnings. Its streaming revenue, streaming ad revenue and streaming subscribers all saw big year-over-year gains.
ViacomCBS shares have been relatively cheap for months. They have been trading in the $40 range after topping $100 in March. Even after Thursday’s spike to a close of $41.55, VIAC stock is still worth less than half what it was a short time ago. Is a recovery finally underway for the stock, and should investors consider buying shares?
Wait, Is VIAC a Meme Stock?
Before going any further, let’s address the meme stock issue. Yes, VIAC stock has been appearing more frequently on Reddit’s infamous r/WallStreetBets forum.
However, before that makes you turn your back on this stock, consider Fortune’s analysis that states VIAC stock is attracting the “hodlers.” These are the retail investors who buy a stock and hold it, looking for a long-term return.
That’s exactly what we’re hoping to see in ViacomCBS — an investment that offers long-term growth.
ViacomCBS Reports Encouraging Q2 Results
On Thursday, ViacomCBS reported its second-quarter 2021 results. They topped analyst expectations and continued to build on a solid first quarter.
One highlight of the report is global streaming revenue that increased 92% year-over-year (YOY). Within that streaming silo, the company added 6.5 million subscribers to bring its total to 42 million. That resulted in an 82% YOY increase in streaming subscription revenue, largely driven by its Paramount Plus service.
Streaming advertising revenue was up 102% YOY. In this case, the increase was led by its ad-supported Pluto TV service, which has more than doubled its revenue for four straight quarters.
Revenue of $6.56 billion was up 8% YOY. Diluted earnings per share (EPS) of $1.50 was a 105% YOY increase. The market reacted to the numbers with VIAC stock closing up 7.1% on Thursday.
What Are the Experts Saying About VIAC Stock?
A month ago, I wrote that ViacomCBS was in a much better position than it has been. With its streaming services beginning to click, its traditional TV offerings still performing well and movie theaters beginning to open, I felt that VIAC stock was ready to leave volatility behind. In Portfolio Grader, shares earn a “B” rating.
We’re not quite at the “steady growth” phase yet, but I think the company’s latest earnings report is another sign that it’s on the horizon. That’s me, but what do other investment analysts think about ViacomCBS?
The Wall Street Journal is tracking 27 analysts who report on VIAC stock. 10 analysts rate the stock a “buy,” two rate it “overweight” and 12 rate it a “hold.” Currently, their average 12-month price forecast is $52.02 for 28% upside. Not spectacular, but solid growth.
Bottom Line on VIAC Stock
ViacomCBS shareholders have seen more than their fair share of drama through 2021. That was especially true in the first four months of the year, when VIAC stock surged 174% between January and mid-March only to collapse in a spectacular fashion.
It’s been caught up in one of the biggest investment stories of 2021: the collapse of Archegos Capital Management. ViacomCBS has also been the target of acquisition rumors. It’s even joined the meme stock ranks.
All of that is enough to scare off many investors. However, the net effect of the combined factors has pushed down the price of ViacomCBS shares. VIAC stock is priced correctly. With the company delivering two strong quarters so far this year, including an impressive Q2, the case for a rally and long-term growth is looking stronger.
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.
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