Will Paramount Stock See Further Gains?

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Upside
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PARA: Paramount Global logo
PARA
Paramount Global

Paramount Global stock (NASDAQ: PARA) has gained about 5% over the past month, marginally outperforming the S&P 500. The company recently posted a weaker-than-expected set of Q3 2022 results, with revenue growing by just about 5% year-over-year to $6.9 billion and adjusted EPS declining by almost 49% year-over-year as it continues to heavily invest in content and marketing for its streaming operations. However, with the stock now down by about 40% year-to-date, investors are likely seeing more value in Paramount, especially considering that its streaming business is making pretty good progress. Paramount’s direct-to-consumer business saw revenue grow by 38% year-over-year in the most recent quarter. In mid-November, Warren Buffett’s Berkshire Hathaway indicated that it had raised its stake in Paramount, and currently holds about 15% of Paramount’s Class B shares.

However, now that Paramount stock has seen a rise of about 5% over the last month, will it continue its upward trajectory in the near term, or is a sell-off imminent? Going by historical performance, there is a 55% chance of a rise in PARA stock over the next monthOut of 728 instances in the last ten years that Paramount stock saw a twenty-one-day rise of 5% or more, 401 of them resulted in the stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 401 out of 728, or a 55% chance of a rise in PARA stock over the coming month, implying a positive near-term outlook for the stock. See our analysis on  Paramount Stock Chance of A Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years’ data

  • After moving 3.1% or more over five days, the stock rose in the next five days on 55% of the occasions.
  • After moving 2.3% or more over ten days, the stock rose in the next ten days on 53% of the occasions
  • After moving 5% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 55% of the occasions.
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See our analysis on Paramount Global Valuation: Expensive Or Cheap for more details on Paramount’s valuation. We value Paramount stock at about $26 per share, about 41% ahead of the current market price. Check out our analysis of Paramount Global Revenue for a closer look at the company’s business model and key revenue streams.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 PARA Return 5% -36% -70%
 S&P 500 Return 2% -17% 77%
 Trefis Multi-Strategy Portfolio 2% -20% 215%

[1] Month-to-date and year-to-date as of 11/29/2022
[2] Cumulative total returns since the end of 2016

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