BC Business
BBTV's growth story is intact, even if the stock is down 80 percent from its IPO.
CEO Shahrzad Rafati is pinning her hopes on BBTV’s Plus Solutions
The stock: If clicks were all dollars, BBTV Holdings (TSX:BBTV) would be a money-spinning behemoth like its competitors for screen time, Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:FB). The Vancouver-based firm counted more than 600 million unique visitors consuming in excess of 50 billion minutes of video content last January, the most among media companies.
Unfortunately, there’s more to monetizing web content than that. Since the company began trading on the Toronto Stock Exchange in October 2020, its stock has steadily slid from $15 down to $3.20 as of Tuesday’s close, giving it a market capitalization of just $45 million.
The drivers: Funny thing, though—the half dozen analysts who cover BBTV still have faith. Their average 12-month target for the stock is $14.50. If they’re right, this might be a pitch to swing for the fences.
BBTV (short for broadband television) is in the business of generating revenue for web content creators. It has about 5,000 such clients, around 50 of which make more than $1 million a year off their content. (The National Basketball Association would be the one with the highest profile.) By helping clients increase retention, collaborate with partners, sell direct advertising, interact with users and gather business intelligence, BBTV sees that they make more money from their content, mostly video, and takes a cut for itself.
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Between 2014 and 2020, BBTV’s compound annual growth rate was 55 percent. Revenue for the 12 months ended September 30 came to $489 million, suggesting a bit of a slowdown, but growth nonetheless. The net loss for the nine months year-to-date was $23.8 million.
Although the performance of its Base Solutions business has been underwhelming, the company is pinning its hopes on a faster-growing premium offering. “Our higher-margin Plus Solutions are an important driver in the improvement of our overall margins and are broadly tracking our ambitious internal goals,” said Shahrzad Rafati, BBTV’s chief executive and board chair, with the release of the latest quarterly earnings.
Word on the street: Analysts still think BBTV is executing according to plan, though they’ve been trimming their targets. “The stock remains attractive relative to its material opportunity to arrive at profitable growth over the next few years,” opines Robert Bek of CIBC World Markets. He has an “outperformer” rating on BBTV and an $11 target.
Coming and going: Despite the generally sour market for recent tech IPOs (see BBTV’s story above), Vancouver-based digital furniture retailer Article has reportedly engaged underwriters with the intention of going public on the NASDAQ Stock Exchange early in the new year. Another local furniture marketplace, Cymax Group Technologies, tested the waters for an IPO in 2020 but ended up shelving that plan.