CuriosityStream Stock is Poised to Breakout
Factual content streaming provider CuriosityStream (NASDAQ: CURI) stock is a content winner in the streaming wars.
Factual content streaming provider CuriosityStream (NASDAQ: CURI) stock is a content winner in the streaming wars. While the major streaming services are always on the hunt for compelling content and blockbuster motion pictures, factual and documentary content is gaining steam. This whole genre of content is exploding as more and more viewers seek factual content. CuriosityStream is riding this wave with nearly 20 million subscribers and thousands of hours of content, many of which is exclusive. The Company has a 23% short interest which makes it susceptible to a short-squeeze on the tiny float of just around 25 million shares. Its growing content library makes it a viable acquisition target for cheap at these levels. Documentary programming has proven to have a lower churn and higher retention rate as demonstrated by Q2 2021 earnings. Prudent investors looking for a stake in the cord-cutting migration and documentary segment of the streaming wars can monitor for opportunistic pullbacks in shares of CuriosityStream stock.
Q2 Fiscal 2021 Earnings Release
On Aug. 4, 2021, CuriosityStream reported its fiscal Q2 2021 results for the quarter ending June 2021. The Company reported a net loss of (-$8.3 million) compared to (-$4.3 million) in same quarter year ago. GAAP revenues grew 27% year-over-year (YoY) to $15.3 million. Total subscribers grew to 20 million, up 40% YoY. Gross margins expanded to 63% from 61% in the year-ago period. The Company entered into a strategic distribution partnership with SPIEGEL TV and Authentic to accelerate its international expansion adding hundreds of hours of German-dubbed programming. The Company expects full-year 2021 revenues to exceed $71 million representing an 80% YoY growth rate. CuriosityStream CEO Clint Stinchcomb commented, “During the quarter, we grew direct subscribers 56% year-over-year while retaining a higher percentage of users who signed up in Q2 2020 than any other streaming service, based on data from ANTENNA. We continue to deliver unprecedented value to our subscribers and partners in the factual category, having recently announced a landmark partnership with SPIEGEL TV, the leading producer and distributor of high-quality factual content for German-speaking audiences. This partnership bolsters our global reach by adding millions of subscribers in Europe, accelerates our growth through the addition of hundreds of hours of German-dubbed programming to our SVOD service, and extends our brand through the introduction of the Curiosity Channel in German-speaking Europe.”
Conference Call Takeaways
Roku Co-Founder and CEO Anthony Wood set the tone, “ I am pleased to report that Roku delivered a strong second quarter with record revenue growth that was driven by exceptional performance in platform monetization. Audiences, content, and advertisers continue their shift to TV streaming around the globe. Roku is a key enabler of this long-term secular trend. This quarter, platform revenue exceeded $0.5 billion for the first time, driven by significant contributions from both content distribution and advertising activities. On the content front, we are seeing direct-to-consumer streaming services lean into our platform’s effective merchandising tools. Also, of note, at the recent upfronts, we closed commitments with all seven major advertising agency holding companies. We had a great Q2, and we are well-positioned for the future.”
CEO Stinchcomb set the tone, “Curiosity is the global factual entertainment brand for people who want to know more. We are deeply rooted in our passion for enchanting and informative storytelling, and our strong direct subscription service with approximately 20 million paying subscribers across our platforms and distributors. We are committed to producing, acquiring, and distributing the best content across every genre the factual category and our original programming this year is resonating more than ever. Unlike many streaming services that rely on one line of revenue, we are delivering strong topline growth on a multifaceted revenue stack, anchored by recurring subscription revenues and industry-leading retention.” He continued, “Let me talk about the second quarter. I’m pleased to report another quarter of robust growth in our direct subscription business, where we grew subscribers 56% year-over-year. New subscribers are joining our service at a rapid clip and the annual anniversaries for subscribers who signed up during the most significant periods of the COVID lockdown in the past. We have successfully navigated retaining those users better than anyone else in the industry.”
Industry Leading Churn and Retention Rates
CEO Stinchcomb addressed the churn, “There were some concerns about an uptick in churn affecting our business when COVID lockdowns in the U.S. lifted. But in fact, we retained in Q2 2021, a higher percentage of users who signed up in Q2 2020 than any other streaming service including Netflix. Our monthly churn remained in the low-single digits during the quarter, as we continued to lead the streaming industry and subscriber retention.” CEO Stinchcomb pointed out the Company’s impressive retention rate, “CuriosityStream led the streaming industry and subscriber retention for the 13 months ended in May of this year. As of the end of May, we had retained 72% of subscribers who joined our service during the height of the pandemic in April 2020. You have Netflix 71%, Disney 55%, Hulu 52%, HBO Max 41% and Apple TV+ 17%.” He concluded, “We believe our industry-low churn demonstrates the high value of our service, as well as the success of our annual subscription strategy. While our competitors typically have one month to prove the value of their service, we have an entire year to train our algorithms, and to learn and to serve our subscribers the content that best suits their preferences.”
CURI Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for CURI stock. Keep in mind the stock has a tiny 25 million shares float and a 23% short interest. The weekly rifle chart peaked off the $23.94 Fibonacci (fib) level. It has since fallen by over (-50%) off its highs as the weekly mini inverse pup was in motion to accelerate the breakdown until its recent earnings release. The weekly 5-period moving average (MA) is stalled at $11.36 as is the 15-period MA at $12.15. The weekly stochastic bearish mini inverse pup has stalled for now. The weekly market structure high (MSH) sell trigger at $12.35 was pierced higher, thereby pushing shorts up. The daily rifle chart has an uptrend with rising 5-period MA at $11.75 and 15-period MA at $11.18. Shares are already testing the daily upper Bollinger Bands (BBs) at $12.82. The daily market structure low (MSL) buy triggered on a breakout above $11.55. Prudent investors can watch for opportunistic pullback levels at the $11.93 fib, $11.55 daily MSL trigger, $11.08 fib, $10.55 fib, $10.22 fib, $9.53 sticky 5s, and the $9.00 fib level. Upside trajectories range from the $15.30 fib to the $22.11 fib level.