Cinedigm (CIDM) Stock: Gaining Big On Q4 Earnings

Cinedigm (NASDAQ: CIDM)

Ciedigm is having an incredible day in the market today, and for good reason. The company reported its earnings for the fourth quarter, beating expectations and exciting investors. Today, we’ll talk about what we saw from the earnings report, how the market reacted to the news, and what we can expect to see from CIDM moving forward. So, let’s get right to it…

CIDM Reports Strong Earnings

As mentioned above, Cinedigm is having an incredibly strong trading session today, and for good reason. The company released its earnings report yesterday after the closing bell, along with key updates. Here’s what we saw from the report.

  • Earnings – In terms of earnings CIDM did incredibly well. During the quarter, analysts expected that the company would report earnings in the amount of $1.05 per share. However, the company surprised investors by reporting a far narrower loss than expected. In the first quarter, the content distributor produced a loss of $0.95 per share, $0.10 ahead of analyst expectations.
  • Revenue – While revenue wasn’t quite as strong as earnings, CIDM definitely didn’t disappoint either. During the quarter, the company generated revenue in the amount of $23.21 million. This figure came in right in line with analyst expectations.
  • Cost Savings – The year 2016 has been an incredibly important year for Cinedigm. That’s because the company launched an initiative early this year with a goal of saving on costs. Along with earnings the company announced that these initiatives are going very successfully. In fact, they are expecting to achieve in excess of $10 million in cost savings this year.
  • Management Changes – Finally, CIDM made key announcements with regard to management. First and foremost, Ron Chez has been appointed as the new lead director of the company. He has served as a strategic advisor to the company for the past year. Also, effective immediately, the company’s board of directors will be reduced from seven members to five members. It was announced that Blair Westlake and Martin O’Connor have made the decision to resign from the board in order to achieve this reduction. In a statement with regard to management changes, CEO Chris McGurk had the following to offer…

This streamlining will further improve board efficiency and I am confident the board is fully aligned with shareholder interest.”

How The Market Reacted To The News

As investors, one of the first things that we learn is that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the stock associated with the news. Adversely, when negative news is released, we can expect to see declines. In this particular case, the news that was released with regard o CIDM was overwhelmingly positive. As a result, the stock had a strong day in the market today. By the end of the trading session, the stock closed the day off at $1.59 per share after a gain of $0.69 per share or 77.06%.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Cinedigm. The reality is that the loss being smaller is good news. However, that’s not why investors are so happy. The excitement is coming from the fact that the company is doing incredibly well on its cost savings initiatives. On top of that, the management news was overwhelmingly positive. At the moment, it seems as though CIDM is on track for strong gains ahead.

What Do You Think?

Where do you think CIDM is headed moving forward and why? Join the discussion in the comments below!