Arena Group Holdings, Inc. (NYSE: AREN)

Sector: Communication Services Industry: Internet Content & Information CIK: 0000894871
Market Cap 167.18 Mn
P/B -16.09
P/E 1.32
P/S 1.17
ROIC (Qtr) 45.47
Div Yield % 0.00
Rev 1y % (Qtr) -11.31
Total Debt (Qtr) 112.94 Mn
Debt/Equity (Qtr) -10.87

About

Arena Group Holdings, Inc., or AREN, operates in the dynamic and competitive media industry, utilizing technology to create deep content verticals powered by leading brands and a top-notch digital media platform. The company's approach involves targeting passionate audiences in key subject matter verticals, capitalizing on the strength of its core brands to expand its audience and revenue. Arena Group's primary business activities revolve around building content verticals in various niches, such as sports, finance, lifestyle, and more. These verticals...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 12.52M provide 32.96x coverage of short-term debt 380000, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 17.56M provides strong 24.77x coverage of stock compensation 709000, indicating sustainable incentive practices.
  • Tangible assets of 46.95M provide exceptional 9.75x coverage of deferred revenue 4.81M, showing strong service capability backing.
  • Operating cash flow of 17.56M provides strong 3.65x coverage of deferred revenue 4.81M, indicating service delivery capability.
  • Retained earnings of (359.84M) represent substantial 34.63x of equity (10.39M), indicating strong internal capital generation.

Bear case

  • Operating cash flow of 17.56M barely covers its investment activities of (9.65M), with a coverage ratio of -1.82, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 8.91M represents just -8.10x of debt issuance (1.10M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 8.83M relative to operating cash flow of 17.56M, which is 0.50x suggests significant maintenance capital requirements affecting free cash flow.
  • Tax assets of 0 provide limited offset against tax liabilities of 872000, which is 0x, indicating potential future cash flow pressure from tax obligations.
  • Tangible assets of 46.95M provide limited backing for working capital of 26.84M, which is 1.75x, suggesting increased operational risk in market downturns.

Timing of Transfer of Good or Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.27 1.10
EV to Cash from Ops. EV/CFO 15.71 -3.08
EV to Debt EV to Debt 2.44 28.98
EV to EBIT EV/EBIT 1.98 -26.54
EV to EBITDA EV/EBITDA 5.26 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF 30.95 -67.01
EV to Market Cap EV to Market Cap 1.65 0.90
EV to Revenue EV/Rev 1.93 61.25
Price to Book Value [P/B] P/B -16.09 1.56
Price to Earnings [P/E] P/E 1.32 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.92
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Int. cover (Qtr) 11.87 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -237.25 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 116.92 175.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 242.84 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 209.85 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) 244.29 32.66
EBT Growth (1y) % EBT 1y % (Qtr) 212.85 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) 172.77 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) 170.88 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 38.00 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.18 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.70 1.54
Current Ratio Curr Ratio (Qtr) 2.51 3.38
Debt to Equity Ratio Debt/Equity (Qtr) -10.87 -0.39
Interest Cover Ratio Int Coverage (Qtr) 11.87 -202.56
Times Interest Earned Times Interest Earned (Qtr) 11.87 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 103.70 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) 97.49 -4,786.62
EBT Margin % EBT Margin % (Qtr) 89.27 -5,002.12
Gross Margin % Gross Margin % (Qtr) 52.60 58.65
Net Profit Margin % Net Margin % (Qtr) 88.50 -5,003.08