The entertainment industry has been benefiting from a surge in demand for digital entertainment, fueled by capacity and operational limitations in movie theatres, theme parks, and cruise lines despite continued ease of travel restrictions.
During the pandemic, consumer habits changed as there was a rise in binge-watching. With the advancement in mobile, video, and wireless technologies, demand for digital entertainment is growing.
Despite the current economic uncertainty and a potential recession, the demand for entertainment content has been relatively resilient. However, analysts believe that switching from staying at home to working could create unexpected challenges for some industry participants.
Given this backdrop, it could be wise to bet on fundamentally strong entertainment stock Playtika Holding Corp. (PLTK). However, DISH Network Corporation (DISH) is best avoided now, as it is not well-positioned to stay resilient to adverse economic and market conditions due to its weak fundamentals.
Stock to Buy:
Playtika Holding Corp. (PLTK)
Headquartered in Herzliya Pituarch, Israel, PLTK is a mobile gaming entertainment and technology company with a portfolio of casual and casino-themed games.
On March 23, 2022, PLTK acquired JustPlay.LOL, an Israel-based creator of the multiplayer game. This acquisition strengthens the company’s growth strategy by expanding its offerings into high-growth action and battle royale genres.
For the fiscal first quarter ended March 31, 2022, PLTK’s revenue increased 5.9% year-over-year to $676.90 million. The company’s net income increased 133.1% year-over-year to $83.20 million. Also, its EPS grew 122.2% year-over-year to $0.20.
Analysts expect PLTK’s EPS for the year ending December 31, 2022, to increase 6.4% year-over-year to $0.80. Its revenue for the quarter ended June 30, 2022, is expected to grow 3% year-over-year to $678.66 million. Over the past month, the stock has lost 9.2% to close the last trading session at $12.34.
PLTK’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
It has an A grade for Value and a B for Quality. Within the Entertainment - Toys & Video Games industry, it is ranked #4 out of 22 stocks. To see PLTK’s rating for Growth, Momentum, Stability, and Sentiment, click here.
Stock to Avoid:
DISH Network Corporation (DISH)
DISH provides television entertainment and technology services through its two primary business segments: Pay-TV and Wireless. It also offers access to movies and television shows through TV or Internet-connected devices and mobile applications for authorized content, search program listings, and remotely controlling certain DVR features.
DISH’s total revenue for the second quarter ended June 30, 2022, decreased 6.2% year-over-year to $4.21 billion. The company’s operating income declined 23.6% year-over-year to $692.93 million, while its net income decreased 22.1% from the year-ago value to $522.83 million. Also, its EPS fell 22.6% year-over-year to $0.82.
Analysts expect DISH’s EPS and revenue for the second quarter ended June 30, 2022, to decrease 38.1% and 5.6% year-over-year to $0.66 and $4.24 billion, respectively. Over the past nine months, the stock has lost 60% to close the last trading session at $17.13.
DISH’s POWR Ratings reflect its bleak prospects. The stock has an overall rating of D, which equates to a Sell in our proprietary rating system.
It has an F grade for Quality and a D for Growth and Sentiment. Of the nine Entertainment - TV & Internet Providers industry stocks, it is ranked last. Click here to see the other DISH ratings for Value, Momentum, and Stability.
PLTK shares were unchanged in after-hours trading Wednesday. Year-to-date, PLTK has declined -24.64%, versus a -12.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
1 Entertainment Stock to Buy and 1 to Sell StockNews.com
