저자: MooreMoney채널진행자 · 외국인
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워런 버핏이 2022년 3분기에 파라마운트(PARA) 지분을 추가 매수했다는 점을 출발점으로, 파라마운트의 실적과 밸류에이션을 분석한 영상이다. 진행자는 파라마운트를 개인적으로 보유 중이라고 밝히며 편향 가능성을 스스로 고지한다. 현재 주가는 연초 대비 약 40% 하락한 상태이고 3분기 실적이 시장 예상보다 나빠 보이지 않아 소폭 반등했다고 설명한다. 스트리밍(Paramount+)은 가입자가 늘고 직접 소비자 매출이 전년 대비 증가했지만, 조정 OIBDA는 9개월 기준 32% 감소해 수익성이 악화되고 있다고 짚는다. 광고 매출은 3분기 4% 증가했으나 정치광고 특수 효과로, 4분기부터는 비교 기준이 약해져 광고 매출이 둔화될 것이라고 예상한다. 케이블 TV 부문(매출의 약 72%)은 코드커팅으로 구조적 위험이 크다고 본다. 영업이익률은 과거 중후반~20%대에서 9.8%로 떨어졌으며, 연간 9.5% 수준을 가정하고 있다. 비용 구조조정이나 인력 감축 가능성도 언급한다. 매출 성장률은 연 3% 내외로 보수적으로 가정한다. 장기부채 156억 달러가 있어 밸류에이션에서 주당 19달러를 차감했다. 내재가치는 주당 약 32달러로, 현재 주가 약 20달러 대비 62% 수준이다. 진행자는 주가가 15달러 아래로 내려와야 관심을 가지겠다고 말해 현 시점 강한 매수 신호는 아니라고 정리한다. 결론적으로 명확한 투자 추천은 하지 않으며, 장기적인 케이블 쇠퇴 리스크를 감안해 투자자 판단에 맡긴다고 마무리한다.
다듬은 글
Warren Buffett in the third quarter of this year actually added to his position in Paramount and I find that very interesting because this is a name that I've been very interested in as of late and so that's what I'm going to cover in this video so as you guys smash that like button let me run that intro what's up guys and welcome back to the channel let's Dive Right into this one because this one's very interesting Paramount is a position that a lot of people don't hold but it's an interesting name nonetheless and so you can see from here in the third quarter of course everybody's well aware of Buffett's initiating position in Taiwan semiconductor I think that's a good play especially considering that they own apple or a large position in apple and so they do a lot of work with Taiwan semi and so it makes a lot of sense also Taiwan semi has a natural sort of like Monopoly over the chip manufacturing space I mean they're not the only people that manufacture chips but they largely are the only company that manufactures the most advanced chips and so it's a good name to have in your portfolio notice that Buffett also continues to invest in oil with a large share purchase of Occidental Petroleum this is a name that I have covered on the channel and I did show you guys a really interesting way of entering in it using cash secured puts utilizing Berkshire Hathaway's bull thesis on it so that was cool but the name that I want to focus on today and I have it highlighted here is that they increase their position in Paramount and just note that as of the recording of the studio Paramount is actually down forty percent on the year of course it jumped a little bit and I think part of the reason why that jump may have happened is because their third quarter results weren't as bad as people were expecting and so let's get into it and you can see just on the front page of sort of like their earnings report that was released on November 2nd Paramount actually added subscribers to their Paramount plus service Pluto TV Remains the number one free ad supported TV streaming service in the US they did really well with smile which is now the Studio's sixth number one film year today I actually watched smile it was a pretty good movie and their affiliate and subscription Revenue grew six percent but let's dive into it and let's make sense of all of this and so the first thing that you got to pay attention to is how is Paramount plus going and so they're actually launching the server so they have launched the service in France Germany Austria and Switzerland so it continues to get launched all over the world which is good and so that's going to help to grow the service out notice that that they're reporting in their new segments and so the way that they're breaking out their segments is TV media direct to Consumer and film and entertainment once they provide their Q4 earnings I'm going to have the comparatives to forecast this company are using the new segments so in this video you're going to see me forecasting it out using their old segmentation but that'll change next quarter but the thing that I want you guys to pay attention to is look at that direct to Consumer segment that's where Paramount plus is notice that it's up 56 percent on a nine month ended basis and three months ended it's up 38 on the revenue line that's very important but I also want you guys to pay attention to the fact that profitability is declining year to date they're adjusted oibda which is effectively adjusted ebitda is down 32 percent and in the quarter it was down less it's down 23 but just a point to note is that profitability is declining now of course that that's going to be a big reason why the valuation is continuing to get hammered in this environment and you know this is a ad spend type business and they do generate quite a bit of money from advertising revenues and advertising revenues are getting weaker as the economy is getting weaker and so you could expect more pressure on the shares there's no reason to sort of buy-in at the moment and if I didn't mention in the video already I actually own a position in Paramount so take anything that I say on this company with a grain of salt because I'm biased as hell but you can see that direct to Consumer is the segment that everybody's looking out for the most and what I like about Paramount is that in their direct to Consumer segment I think this is the best part of the investment thesis in the company overall because you don't care if free TV wins or if paid streaming wins they own a leading platform in both and so that's really good even Netflix free streaming service will not actually be free it'll just be a lower monthly subscription type model and so this is the true Free TV model that they have with Pluto TV but of course when it's free and AD supported it means of course it's ad supported so you gotta watch out for advertising revenues declining I'll talk about that in a second but first let me just talk about Paramount plus it was the number one streaming service in the US in terms of signups and gross subscriber editions year to date which is very important because other streaming services are losing people now let's get into that advertising Revenue section notice that ad revs actually Rose four percent year over year in the quarter that's insane and so last quarter I was actually concerned about advertising slowing down like we have seen with meta and like we have seen with alphabet specifically YouTube I still do expect to see an advertising decline with Paramount in future quarters so that's a hot take and the reason why I do feel like it could decline in future quarters is because remember in Q3 you also had that midterm election type spending which is not gonna occur in Q4 and so you could have worse comparatives now let's dive into the TV segment this is their largest segment for the business overall but it's also the segment that's most at risk so notice that Paramount's family of cable networks continue to grow share year over year and they're growing in the key demo which is the 18 to 34 year old people and so that's really good but as I just said advertising Revenue declined three percent year over year in this segment and they actually called it out specifically which I'm glad they did increases from political advertising spending and pricing only partially offset the impact of lower Impressions and foreign exchange and so be careful guys now that the midterm political ad spending is done once again I do expect much weaker comps in the final quarter and I'm not really sure how many people have baked that into their numbers as they forecast out the valuation for Paramount you really have to sort of like be in the know or just understand the business really well to sort of pick up on this fact so pay attention to that ad spend is expected to decline in a weakening economy and you're going to have weaker comps especially in Q3 of next year because Q3 of this year was propped up by political ad spending so just keep that in mind and so the biggest risks to the investment thesis is that Paramount is highly levered to this segment the TV media segment which makes up 72 percent of their revenues now remember guys this segment continues to go away with continued core cutting so buyer beware this is not an easy investment there's a reason why this company's trading very cheap and I wouldn't expect the faint of heart to be investing in this and so once again never take anything that I talk about on this channel as a recommendation to buy a stock everything has its risk and you have to make the decisions for yourself or if you're new speak with your investment advisor but now let's get into the financial statements because I want to show you something very interesting that's happening in this environment so notice this is their p l for both the three months ended of the recent quarter and year to date no notice that the profitability so that's that operating income number divided by the revenues the profitability or operating income as a percentage of revenues is 9.8 percent nine months ended in the current quarter and last year year to date it was 17.6 so as we're seeing profitability decline significantly year over year could we see cost restructurings I think we're probably going to see that so will they get rid of lost leading businesses well if they're non-core loss leading businesses maybe and we might even hear about some layoffs as well so pay attention to this I do predict that there's going to be some cost restructurings happening in the future that's just a hot take I don't know anything it's just bold prediction based on how I'm seeing the financials play out now and now notice this is the model that the patreons get access to for Paramount and if you want to access this model and all the other models that the patreons get access to you can access that at the lower tier of the patreons which is just five bucks a month I give away all of my research for just about like a coffee or two per month and so notice that in fiscal year 2017 to 2021 they had an operating profit margin of the mid teens to sort of like the low sort of 20 area like they did in 2018 however in 2022 as I was building out my model I actually forecasted their operating profit margins to decline to 9.5 percent now I have to Pat myself on the back here because my modeling was on point I was forecasting 9.5 and thus far they've come in at 9.8 percent I actually expect the fourth quarter to be challenging for them so in fact I actually think they're going to come just a little bit under 9.5 for the year but I'll just continue modeling this out at 9.5 because they are a little bit over and I don't expect a recovery for the next couple of years so you guys let me know how you guys think this should be modeled let me know if the operating profit margins are a little bit too low I think a lot of people are are modeling out higher profit margins which is causing them to be more interested in the security than not but because the fact that the security is down 40 percent the opposite might also be happening where people might be a little bit too pessimistic in their modeling as well for profitability so there's no right or wrong answer here you guys let me know in the comments below what you think or what you guys are modeling out now if you're not modeling anything out you don't have anything to add there no problem drop a meow in that chat anyways just to help with the algorithm now when it comes to forecasting out revenues I'm sort of like pessimistic on overall Revenue I don't really know how to think about it yet I'm waiting for their annual report to come out to sort of give me a better understanding of how to forecast it out currently they're surpassing that three percent Revenue growth overall but I think weaker Q4 comps could bring us a little bit backwards into 2020 in 2022 to end the year off and so I think a three percent overall Revenue growth is reasonable and then I'm not really forecasting out greater than three percent thereafter now once again again I will build this out using their new segmentation once they release Q4 results but once again I'm not taking a position on any segment right now but once I revise the model and I will let the patreons know once I do revise the model I will make sort of like a more granular estimate as I forecast Revenue out now just exactly and generating this year thus far well notice that their net cash flow provided by operating activities for the nine months ended in September of 2022 was only 326 million dollars and so it's not a lot of money and so they haven't really generated much free cash flow this year but of the cash that they do have they're using it to pay down debt so notice that that repayment of that number is 3.1 billion dollars this year and that leaves them with 3.4 billion dollars at the end of this last quarter and it's down from you know this time last year of 4.8 billion dollars now why are they focusing on paying down debt well you can see that they still have 15.6 billion dollars of long-term debt and of course you guys know that every valuation that I make I provide a excess Capital calculation where if the company has excess capital I will benefit their valuation for that but if they have an excess amount of debt in other words negative Capital which is like what we have here I will penalize their Equity valuation for that amount because if I was to buy the business the first thing I'm going to do is completely wipe out that debt now some people can argue that most businesses are going to operate with a base level of debt and so you don't necessarily need to wipe out all of it so you don't have to penalize them that much for their debt but I'm a little bit more conservative when it comes to my valuations and I'm okay with that and so I'm happy to lose out on opportunities by being a little bit more conservative that's totally fine with me you guys let me know what you think but all this comes down to what does the valuation look like but before I show you the valuation I just want to remind you guys that approximately 80 percent of the watch time on this channel is from people that are not subscribed so if you have the opportunity hit that subscribe button okay now let's go right into the EPS valuation and you can see that I'm actually valuing the company using a terminal multiple of 12.5 times earnings at 51.52 a share but you can see that I'm penalizing them by 19 a share for that excess debt that they have that long-term debt so my EP es valuation or My Equity valuation is 32 dollars per share if you compare that with the current share price of approximately 20 bucks or 1991 the company is not a super value right now they're trading at 62 percent of its intrinsic value so it's not in like the screaming by territory and I wouldn't be interested in this name until it was under 15 per share but based on the current share price and where earnings are expected to come in at it's giving you a current 11 Equity yield so it could be interesting to people who believe in the stability of the earnings now how should the earnings or how do I expect the earnings to play out well let's start with what the market is thinking first well you can see here that the market expects an approximate double digit earnings yield I'll deal although it's a bit Rocky into the next five years so they expect a 10 earnings yield in 2022 it goes down a little bit in 2023 comes back up in 2024 and I guess in 2023 they're expecting a recession which almost everyone but he's baking in right now so that's why the earnings yield is a little bit lower they expect a recovery in 2024 and then in 2025 and 2026 that's when earnings sort of take off and so you could essentially generate a 20 Equity earnings yield if you hold on to this name uh for more than five years but more importantly what do I think it's going to look like well I'm not really baking in as much rockiness from a recession in 2023 as most other people are I sort of just forecast these things out linearly try to come up with a Perpetual evaluation and So based on what I'm seeing this is completely uh an investment I.E dividend share buyback type opportunity the question is is the business model sustainable over the long term you can see here that my EPS is just gradually growing in 2025 it grows a little bit faster because I expect profitability to increase a little bit more and so notice that the EPS jumps from 2.42 in 2024 to 3.42 and so of course the equity yield you look at the very bottom there jumps from 12.2 percent to 17.2 percent and then it gradually increases closing in on 30 by 2031 and so if this forecast is achieved and that's a big if I believe the equity value should increase from higher earnings to apply the current multiple on and a lower debt penalization which is what I showed you earlier as it will have paid back a large amount of that debt back with the earnings that they've been generating and so this of course does not take into account the increased valuation multiple that the company would commend once it's somewhat de-risked with lower amounts of debt as well and so in my valuation notice that I did give them a higher multiple I gave them 12.5 times earnings compared to the 7.1 times earnings that they're currently trading at and so I did give them a slight increase in that valuation which helps with the valuation but once again it's not a screaming buy just yet but no that the valuation could potentially be considered as somewhat optimistic because the company still faces the secular headwind which is cord Cutters and so you really have to make a decision on this one whether or not you think that that risk is higher or lower than what the valuation is taking into account and so this might be too hard to predict for many of you and I completely understand that and so I totally understand if you guys decide to throw this in the too hard to Value bucket it totally makes sense now there is one company that I recently did a video on that is a lot easier to value and I totally think of this company as a Berkshire Hathaway type business but it might just be too small for them to buy but it's not too small for us to buy and so the company that I'm talking about is H R Block and if you haven't seen my latest video on H R Block I think it's a great opportunity and it's a double digit Equity yielding type opportunity and so if you want to take a look at that video you can get to it right here
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