So what to make of Helios and Matheson Analytics Inc’s (NASDAQ:HMNY) latest success? On Tuesday morning, the little-known IT firm stunned Wall Street with a report showing a strong continued growth for its MoviePass subscribers. HMNY shares are soaring nearly 20% today on the news.
MoviePass has surpassed over 600,000 paying monthly subscribers as of October 18, 2017, up from approximately 20,000 as of August 14, 2017, the day before MoviePass announced its new $9.95 per month subscription price. The continued growth trajectory exceeded MoviePass’ initial projections, and now MoviePass projects that it will acquire at least 3.1 million additional paying subscribers through August 18, 2017, exceeding its previous estimate of 2.5 million subscribers. HMNY also announced that MoviePass had a subscriber churn rate of 4.2% for month 1 and 2.4% for month 2 after announcing its new $9.95 per month subscription price. Based on current churn rates, monthly subscriber retention is above 96% and average paying monthly subscriber life expectancy is 46.8 months.
“Month after month we aim to improve our service with faster card delivery, improved application updates, and an easier-to-use web site. We believe our strategy is paying off in terms of increased satisfaction, reduced churn, and faster growth,” said Mitch Lowe, CEO of MoviePass. “I believe our ongoing investments in customer experience, usability and convenience have steadily improved customer satisfaction and retention.”
Following HMNY’s purchase of a majority stake in MoviePass, which remains subject to the approval of HMNY’s stockholders, HMNY plans to further integrate its data analytics capabilities with the MoviePass service to analyze moviegoer’s behaviors and preferences, with the goal of helping the film industry better understand what audiences want. With HMNY’s capabilities, HMNY believes that MoviePass can bridge an intelligence gap for the movie theater industry so the entire film ecosystem can better serve audiences in areas ranging from production to advertising.
“When you apply computer science and machine learning to an industry that we believe has lacked significant innovation, useful patterns start to emerge,” said Ted Farnsworth, Chairman and CEO of HMNY. “More subscribers mean more data. Together, I believe HMNY and MoviePass can offer important analytics to movie studios and exhibitors while serving the interests of moviegoers in the process. ”
On the ratings front, Maxim Group analyst Brian Kinstlinger assigned a Buy rating on HMNY, with a price target of $20, in a report issued on October 2. The current price target implies an upside of 50% from current levels. According to TipRanks.com, Kinstlinger has a yearly average return of 3.4%, a 58% success rate, and is ranked #1513 out of 4705 analysts.
Helios & Matheson provides information technology consulting, training services, software products and enhanced suite of services of predictive analytics. Its solutions cover the entire spectrum of IT needs, including applications, data, and infrastructure.