Maxim Calls Dolphin Entertainment (DLPN) Stock a Buy Following Earnings Beat


Shares of Dolphin Entertainment (NASDAQ:DLPN) are climbing nearly 13% in Thursday’s trading session, after the leading family content provider apparently delivered the goods with its fourth-quarter financial results.

In reaction, Maxim analyst Brian Kinstlinger reiterates a Buy rating on DLPN, with a price target of $6.00, which implies an upside of 57% from current levels. (To watch Kinstlinger’s track record, click here)

Kinstlinger commented, “4Q17 revenue of $7.2 million was above our estimate of $6.5 million; better than expected revenue was driven by 42West, which increased 9.2% sequentially to $5.9 million, and from the Content Production division, due to its legacy Max Steel film. We expect Max Steel to contribute approximately $0.3 million in revenue in 2018 as its related revenue stream comes to a conclusion. Adj. EBITDA of $1.1 million was above our $0.9 million estimate driven by higher-than-expected Max Steel revenue. However, a net loss of $2.7 million during the quarter was well below our estimate of $0.8 million in net income. The net loss was largely impacted by non-cash and onetime items, including amortization of production costs ($1.3 million), amortization of intangible assets (~$0.3 million), changes in fair value of warrant liability and puts (~ $0.7 million), and approximately $0.5 million in legal and accounting fees associated with its recent up-listing. We expect there could be additional volatility quarter-toquarter in non-cash charges related to the changes in fair value of warrants and puts.”

 

Dolphin Entertainment is a leading independent entertainment marketing and premium content development company. Through its recent acquisition of 42West, the company provides expert strategic marketing and publicity services to all of the major film studios, and many of the leading independent and digital content providers, as well as for hundreds of A-list celebrity talent, including actors, directors, producers and recording artists. 42West is a recognized global leader in PR services for the entertainment industry and, in December 2017, the New York Observer listed 42West as one of the top four most powerful PR firms of any kind in the United States.