Montreal-based music content distributor Stingray recorded its best trading session of the year on Wednesday and one of its most interesting since its listing on the stock market nine years ago.
The stock rose 12% during the day to close at $7.80 on the Toronto Stock Exchange. Investors pushed the stock forward following the presentation of year-end financial performance the previous evening.
The stock is now up nearly 30% so far this year and more than 85% since hitting a low of $4 in the fall.
At its current price, however, the stock is still far from its all-time high of $11 six years ago, reached just before the announcement of the purchase of around 100 radio stations across the country.
Stingray, whose audio advertising in retail stores is becoming increasingly important, continues to be a hit on Bay Street. All six analysts with an official interest in the company’s day-to-day operations still recommend buying the stock, according to information compiled by financial data firm Refinitiv.
Stingray management revealed revenues up 6% year-on-year, to 83.7 million, for the first three months of 2024, while the market was hoping for 84.7 million.
Adjusted gross profit for January, February and March shows an increase of 11%, to 29.4 million, compared to the same period last year, which is higher than the 28.5 million expected by experts. Adjusted earnings per share of 22 cents for the quarter exceeded the 19 cents expected by analysts.
A net loss of 46 million is reported for the quarter due to a non-recurring, non-cash impairment of 56 million of goodwill relating to the radio sector.
Management said it had to do this reassessment because, as the pandemic came to an end, revenues from the radio business had not returned to their 2018 level (when they were purchased) – at least, not yet. Stingray’s radio revenues were up 5% in the quarter, however.
Co-founder and CEO Eric Boyko notes that the company has lowered its debt level amid high interest rates in fiscal 2024. “We expect to further reduce our leverage ratio in fiscal 2024. 2025, which will give us the headroom to invest in organic growth and growth through acquisitions,” he says.
Stingray’s 2025 fiscal year began on April 1.