Paramount Global (PARA, Financial) has experienced a notable 6.78% gain in its stock price over the past week, with the current price standing at $16.85. However, this short-term uptick contrasts with a significant 23.82% loss over the past three months. With a market capitalization of $11.13 billion, Paramount Global's stock performance has been a subject of interest for investors, especially when considering the GF Value of $30.56, which suggests a potential undervaluation. Despite this, both the current and past GF Valuations indicate a "Possible Value Trap, Think Twice" status, urging investors to exercise caution.
Understanding Paramount Global
Paramount Global operates within the diversified media industry, boasting a vast array of assets and operations. The company is a result of the merger between CBS and Viacom, creating a media powerhouse with a global reach. Its portfolio includes television networks such as CBS, Showtime, and a stake in CW, alongside cable networks like Nickelodeon, MTV, and Paramount Pictures. Paramount Global also runs streaming services, most notably Paramount+ and Pluto TV. 
Profitability Insights
Paramount Global's Profitability Rank stands at 7/10, reflecting a relatively strong position within the industry. The company's Operating Margin is currently at -1.49%, which is better than 36.65% of companies in the industry. In terms of return metrics, Paramount's ROE, ROA, and ROIC are -4.96%, -1.95%, and -0.66% respectively, each outperforming a significant portion of their peers. Notably, the company has maintained profitability for the past 10 years, a commendable feat in the media landscape.
Growth Trajectory
The Growth Rank for Paramount Global is 4/10, indicating moderate growth prospects. The company's 3-Year and 5-Year Revenue Growth Rates per Share are 2.00% and 1.80% respectively, showcasing steady, albeit modest, revenue expansion. The estimated Total Revenue Growth Rate for the next 3 to 5 years is projected at 1.96%. However, the 3-Year and 5-Year EPS without NRI Growth Rates have been negative at -30.10% and -17.90%, respectively. Looking ahead, the EPS Growth Rate for the next 3 to 5 years is expected to rebound to 12.65%.
Key Shareholders
Paramount Global's shareholder base includes notable investors such as Warren Buffett (Trades, Portfolio), who holds a significant 14.39% share with 93,730,975 shares. John Rogers (Trades, Portfolio) and HOTCHKIS & WILEY are also prominent holders, with 1.74% and 1.06% shareholdings, respectively. The influence of these major investors can play a crucial role in the company's strategic decisions and market perception.
Competitive Landscape
In comparison to its competitors, Paramount Global holds a middle ground in terms of market capitalization. Endeavor Group Holdings Inc (EDR, Financial) has a market cap of $7.39 billion, while TKO Group Holdings Inc (TKO, Financial) stands at $6.05 billion. News Corp (NWSA, Financial), another competitor, slightly surpasses Paramount with a market cap of $12.69 billion. This positioning within the industry highlights Paramount's significant, yet not dominant, market presence.
Conclusion
In summary, Paramount Global's recent stock performance has been a mix of short-term gains and longer-term losses, with the GF Value suggesting potential undervaluation. The company's profitability metrics are relatively strong, although growth rates indicate some challenges ahead. The presence of influential shareholders like Warren Buffett (Trades, Portfolio) adds an interesting dynamic to the investment thesis. When juxtaposed with its competitors, Paramount Global holds a competitive stance in the media industry, warranting a closer look from value investors considering the company's market position and future prospects.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
