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Helios and Matheson Analytics Inc (HMNY): Long-Term Opportunity for Large, Attractive Recurring Revenue Business, Says Austin Moldow

Canaccord's Austin Moldow sees no end in sight for rapid-fire gains from HMNY's MoviePass following favorable management meetings.


After sitting in on various Helios and Matheson Analytics Inc (NASDAQ:HMNY) and majority-owned subsidiary MoviePass management meetings with investors, Canaccord analyst Austin Moldow is feeling just as bullish as his first bet on this tech player.

The analyst reiterates a Buy rating on HMNY stock with a $15 price target, which implies a close to 335% upside from current levels. (To watch Moldow’s track record, click here)

First, Moldow anticipates growth to keep picking up for the company whose stake in MoviePass – a Netflix-like platform designed to intrigue movie theater goers with an attractive monthly subscription price – has already secured a subscription base of over 2 million in 7 months’ time of making the price cheaper. Moldow predicts the company can garner 12 million subscribers in the next four years.

“With this audience level, we believe MoviePass should evolve to yield considerable bargaining power, which should drive costs low enough to help flip the currently negative gross margin profile. There are myriad risks, but over time we see opportunity for a large, attractive recurring revenue business,” notes the analyst.

Bottom line, “MoviePass continues to gain leverage with industry participants – The company currently purchases ~6% of tickets nationwide; however, it’s able to pull several levers for a given title to increase that share and cause sales lift. In one instance where it marketed on behalf of Gringo (an Amazon Studios movie), MoviePass has purchased 23% of tickets to-date (released March 9). We believe this helps MoviePass on both sides of the gross profit equation: 1) it proves out its ability to effectively market titles for movie studios and 2) also proves out the impact on theatre traffic for exhibitors,” surmises Moldow, confident following these “upbeat” management meetings.

According to TipRanks, one other bull bets on this stock: Brian Kinstlinger of Maxim has a Buy rating on HMNY stock with a $16 price target, marking a nearly 364% upside potential from where the stock is currently trading.