Should you buy Buzzfeed stock? (Apr 2023)
- 6 months ago
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If you are looking for a depressing stock chart, then BuzzFeed would do great. Since its public debut through a SPAC (special purpose acquisition company), its share price is down more than 90%.
Unlike its competitors, BuzzFeed is focusing most of its content on Gen Z and Millennial audiences by creating content in short forms. The management puts a lot of attention to metrics that relate to the # of Reels and Shorts views, as well as the output of short form vertical videos on TikTok, Instagram, and YouTube.
Other than its flagship BuzzFeed brand, the company owns the food brand Tasty, HuffPost (which was acquired in February 2021), as well as Complex Networks (acquired in December 2021).
Although all of this might sound great, if we take a closer look at the financials, it seems that BuzzFeed is struggling to meet ends.
Its revenue keeps growing ($321m in 2020 $437m in 2022), but the operating profit (excluding impairment expense as a one-off) decreased from positive $12m to negative $80 million. This represents a negative operating margin of -18%!
What has changed over these few years?
One of the main reasons for this decline is the drop in their gross margin, from 56% to 40%. The gross profit that the company is generating is not sufficient to cover the Sales and Marketing and the General and Administrative expenses.
#investing #stocks #stockstowatch #finance
If you are looking for a depressing stock chart, then BuzzFeed would do great. Since its public debut through a SPAC (special purpose acquisition company), its share price is down more than 90%.
Unlike its competitors, BuzzFeed is focusing most of its content on Gen Z and Millennial audiences by creating content in short forms. The management puts a lot of attention to metrics that relate to the # of Reels and Shorts views, as well as the output of short form vertical videos on TikTok, Instagram, and YouTube.
Other than its flagship BuzzFeed brand, the company owns the food brand Tasty, HuffPost (which was acquired in February 2021), as well as Complex Networks (acquired in December 2021).
Although all of this might sound great, if we take a closer look at the financials, it seems that BuzzFeed is struggling to meet ends.
Its revenue keeps growing ($321m in 2020 $437m in 2022), but the operating profit (excluding impairment expense as a one-off) decreased from positive $12m to negative $80 million. This represents a negative operating margin of -18%!
What has changed over these few years?
One of the main reasons for this decline is the drop in their gross margin, from 56% to 40%. The gross profit that the company is generating is not sufficient to cover the Sales and Marketing and the General and Administrative expenses.
#investing #stocks #stockstowatch #finance