Maxim analyst Brian Kinstlinger is out with a new bullish note on shares of Helios and Matheson Analytics Inc (NASDAQ:HMNY), reiterating a Buy rating, while lifting the price target to $25.00 (from $20.00) (To watch Kinstlinger’s track record, click here).
The new price target reflects a rapid subscriber growth over the next two years, and reduced financing risk due to the recent refinancing activity where the company raised $20.65 million through the sale of a convertible note with a strikeprice of $12.06 (and has the ability to raise another $80 million under these terms).
Kinstlinger opined, “We argue this eliminates the short-term financing challenge to fund the over usage by MoviePass subscribers, though additional capital will be required.”
On October 24th, the company announced it had more than 600,000 subscribers, compared to 20,000 on August 15, when the price was dropped to $9.95 per month from a previous average of $30 per month.
“We had previously expected the average number of subscribers would be about 600,000, but with the rapid pace of subscriber growth, we now project an average of 733,000 in the December quarter and that MoviePass will exit 2017 with 880,000 subscribers. Furthermore, MoviePass said that churn is 4.2% one month after subscribing and 2.4% after the second month, which is lower than our model predicted, and lower than the historical churn data for MoviePass at higher monthly prices. Our view is that MoviePass will build scale quickly given the obvious value proposition. By removing the high price per movie ticket out of the equation, we expect subscribers will double the number of movies they see annually, as the data on MoviePass subscribers already suggests,” Kinstlinger added.
Helios and Matheson is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, artificial intelligence, business intelligence, social listening, and consumer-centric technology. Its holdings include RedZone Map, a safety and navigation app for iOS and Android users, and a community-based ecosystem that features a socially empowered safety map app that enhances mobile GPS navigation using advanced proprietary technology.