Many companies are shaking off the adverse effects of the pandemic. The vast improvement in their financial health or potential growth in post-pandemic reflects on their stock performances and price forecasts. For example, the embattled Corus Entertainment (TSX:CJR.B) gained by as much as 43.5% in one year.
Return to profitability
Corus Entertainment is not only an icon in Canada’s media industry but a significant player internationally. Last year was forgettable for investors as the share price sunk below $2 during the market selloff. The company also lost $625.3 million in fiscal 2020 (year ended August 31, 2020) versus the $156 million net income in fiscal 2019.
Segment revenues from TV and radio declined 13% and 43%, while advertising revenues dropped 25%. Its free cash flow also dropped 4% to $296.2 million for the year. Nonetheless, Corus President and CEO Doug Murphy said the Q4 fiscal 2020 results exceeded management’s expectations.
Fortunately, the narrative has changed in fiscal 2021. The $1.19 billion media company made a spectacular return to profitability. Its net income for the year reached $172.55 million, although free cash flow declined 15% to $251.9 million. Murphy said, “The benefits we are seeing from the disciplined execution of our strategic plan, in concert with emerging powerful tailwinds from the economic recovery.”
For Murphy, Q4 fiscal 2021 was another impressive quarter of top and bottom-line growth. Management expects a solid start to the fiscal year 2022 as Corus advances its strategic priorities. Its streaming services are experiencing strong subscriber gains once more. Similarly, the demand for Corus Studios and Nelvana content remains robust while international sales are ever-growing.
Regarding the stock’s performance, the year-to-date gain is 35.3%. Corus even outperforms the TSX (+24.57%). Based on market analysts’ forecasts, the price could climb between 48% (average) and 78% (maximum). The overall return could be higher given the 4.27% dividend. Thus, the stock is a great buy at $5.62 per share.
Transforming the digital ad industry
As with Corus Entertainment, market analysts are bullish AcuityAds. They see an upside potential of as high as 109%. The share price of $4.94 could skyrocket to $10.33. Currently, the stock is down 65.43%, so it’s an excellent time to take a position before the impending breakout.
AcuityAds provides digital media solutions not only to small and mid-sized companies but also to Fortune 500 enterprises. This $319.56 million technology firm is making waves in North America, Europe, Africa, and the Middle East. It’s now the tech leader in consumer journey-based advertising automation.
The Illumin platform is the primary driver of future growth. According to Tal Hayek, co-Founder and CEO of AcuityAds, the company is fundamentally transforming the programmatic advertising industry. Business is thriving, as evidenced by the $8.08 million net income after three quarters in 2021. The company lost $474.4 million in the same period in 2020. In Q3 2021, it generated a record cash balance of more than $100 million.
Corus Entertainment and AcuityAds should be on your buy list this November. The growth runway is long, while the potential near-term return on investment could be 50% or more.