Loop Media (NYSE American: LPTV) stock bucked the bearish market sentiment on Wednesday, scoring an over 9% gain to $3.56 at press time on much higher than average volume. Intraday, the move was more impressive, with LPTV shares reaching $3.80, representing an over 14% increase since the week's start. Investors already following Loop, and those familiar with its products, are not likely surprised by the enthusiastic sentiment. They know what others are just now learning- Loop Media is one of the fastest-growing digital out-of-home (DOOH) TV and digital signage platform providers, focused on maximizing potentially massive revenue-generating opportunities from its formidable product arsenal that can capitalize on niche opportunities from its targeted business clientele. (*share price 02:34 PM EST, 05/31/23, Yahoo! Finance)
And that's precisely what they are doing. In fact, LPTV is providing plenty of supporting evidence that its pace of growth is shifting from hyper to warp speed, evidenced by expanding product and service placements that do more than show adoption of LPTV products is increasing; it helps expose a value investment proposition for those looking to seize on valuation disconnects. And despite its recent surge, the gap between a fair-valued LPTV and its share price still looks too wide. However, that's not necessarily a bad thing. Valuation disconnects present opportunities, which in this case, LPTV may be one too good to ignore.
Yes, that's a bullish assessment. But it's justified knowing that the differences between LPTV's services and its competitors are more than advantages; they are value drivers. And there are plenty of them, including allowing its users to stream over 200 free music videos, news, sports, and entertainment channels through its Loop TV service. In fact, more than differentiators and value drivers, it's made LPTV the leading company in the U.S. licensed to stream music videos to businesses through its proprietary Loop Player.
Leveraging Its Leadership Position In DOOH Markets
And they are not sitting on that achievement. Instead, Loop is leveraging the power inherent to that position, shown by LPTV digital video content already reaching millions of viewers in DOOH locations, including bars/restaurants, office buildings, retail businesses, college campuses, airports, and on free ad-supported TV platforms like Roku. That's not all. Content is even being provided at local gas stations on GSTV terminals in the United States, which opens the door to potentially millions more viewers that, at the same time, expands market reach and brand awareness. In other words, while LPTV showed impressive growth in 2022, 2023 could be its breakout.
Again, not an overly optimistic proposition, considering that Loop is fueled by one of the largest and most important video, music videos, movie trailers, and live performance content libraries. And as important, LPTV's broad content catalog caters to many genres and moods, with an impressive array of movie trailers, sports highlights, lifestyle and travel videos, and viral videos targeting and reaching exclusive demographics. But the better news about Loop Media is that its streaming services do more than provide compelling in-demand content; as a publicly-traded NYSE-American company, they also present a compelling investment proposition.
And with income rising from advertising, sponsorships, integrated marketing, branded content, and subscriptions, it may be one worth seizing while the value window is still open.
LPTV Is Expanding Its Market Presence
Know this, too. LPTV's growth is no coincidence; it's part of LPTV's mission to deliver streaming TV to businesses and unlock the potential for them to inform, entertain, and engage their customers. But LPTV has selfish interests, too; they want to make money and increase shareholder value by enabling advertisers to reach consumers in an out-of-home environment in a measurable and targeted way. Here's another thing to consider: LPTV didn't create the market; they are seizing unique opportunities within it.
Disney (NYSE: DIS), Netflix, Inc. (NASDAQ: NFLX), and ROKU (NASDAQ: ROKU) have already blazed the trail. But often the case, becoming industry behemoths can have its drawbacks. Specifically, those companies become less business agile, making it hard to redirect courses to meet fast-changing demands. While a potentially difficult situation for them, it serves up extraordinary marketing opportunities for developing companies that are agile enough to exploit under-served niche market opportunities. LPTV also checks that box.
Focused where others aren't, Loop has expanded its national distribution and reach across multiple end markets across North America, targeting largely untapped markets through its current 56,000~ Active Loop Players and partner screens. In addition to that number being 5.4X the number of players than the last year, they have facilitated LTPV devices to generate over two Billion video impressions monthly. That massive number matters since advertisers focus on impressions when evaluating ROI. It also matters from where those impressions originate, and Loop is again checking the right boxes.
Loop content is made available in bars, restaurants, automotive centers, and fitness centers, to name a few. In fact, all tolled, its players and screens reached many high viewership sectors, facilitating over $30 million in 2022 revenues. 2023 is expected to be even better. Comparative Q2 revenues in 2023 were 11% higher than last year and, notably, scored an impressive gross margin of 29.4%. That's better than most peer performances. Better still, momentum is at its back.
Being A Disruptor Has its Advantages
That, too, is no coincidence. It results from LPTV establishing its place as a premium provider of licensed and low-to-no-cost original content from over 165 music label partnerships channels, 40+ non-music content channel partnerships, and 5 original content channels that use licensed or purchased content that is reformatted into short-form content suitable for commercial use. Here's more excellent news about LPTV- they are timely to the market opportunities.
As part of the disruptive genre, LPTV is capitalizing on a massive shift in how consumers view content. In 2011, 98% of media was provided through traditional cable-style networks. Fast forward to 2023; only about 28% of the content is watched through those sources. While a staggering shift, which the cable companies thought could never happen, expect the streaming providers' share to grow appreciably higher. Millions of viewers are just now recognizing the ease of "cutting the cord" as a new generation of television and computer technology shows how unnecessary pay-to-play content is. Those thinking that industry giants ATT (NYSE: T), Comcast (NASDAQ: CMCSA), and DISH (NASDAQ: DISH) aren't concerned about the shift, think again. They are scrambling to find ways to keep subscribers, sometimes utilizing massive loss-leader promotions to keep their counts.
But they aren't wearing blinders, either. They recognize opportunities to consolidate with smaller companies, like LPTV, that are gaining share. In other words, smaller streaming content providers can certainly be in the acquisition crosshairs of the industry's current mega players. There are reasons for them to take advantage of opportunities sooner. In fact, revenues from digital ad spending are surging, with current digital DOOH and OOH advertising spending estimated at $10.3 billion and $42.1 billion, respectively. Those are the recent numbers. In 2024, the ad spend is expected to explode to $144 billion for digital retail media, pushed higher by a 23% CAGR through next year.
That's the biggest reason why being different and better matters.
When Being Different Is Good
At the risk of sounding redundant, Loop checks that box, too. In fact, it offers one of, if not the most, differentiated offerings of curated short-form content for OOH venues. That's meaningful to viewers and to outlets, brands, and advertisers. To meet all expectations, Loop utilizes its proprietary media distribution platform to deliver its broad content library to satisfy each party in the value model.
For Loop, it earns the most value from its expanding partner platform, accelerating its revenue-generating reach into advertising sales services to third-party platforms with an existing network of screens for quick distribution; Loop retains a percentage of advertising revenue from those digital ad sales. And with a strategy to stay focused on the high-traffic point-of-sale centers like convenience stores, grocery stores, and other specialty retailers, noting that those locations allow for higher frequency ad placement with significantly less dwell time, income from those placements is expected to strengthen revenue-generating momentum.
And keep in mind that when appraising the intrinsic and inherent value of LPTV, they work with all parts of the advertising chain, including the largest DSP/SSP programmatic partners and the majority of Fortune 200 ad-buying companies that already use the LPYV platform. The business earned from those industry giants results from LPTV's differentiated features, especially those related to its focus on end-to-end technology solutions, programmatic expertise, original content creation & curation, open API compatibility, and diversified content library.
Focused On Hitting 2023 Targets
Investors wanting assurance that LPTV is executing its strategy as intended should know this. While 2022 and the start of 2023 performances have been impressive, the pace of delivering a better product and service to clients is accelerating. In other words, trajectory indicates that the back part of this year can be milestone-filled, which, more importantly, can turn into catalysts. Those are the events that typically send share prices higher.
That happening would be intentional. Remember that LPTV is advancing an aggressive schedule to become a more prominent services provider by increasing distribution in desirable geographies, targeting new customer types and adding additional niche content, and optimizing advertising sales and sponsorships by improving audience targeting, data, and analytics capabilities. Factor into that expediting its international expansion targeting under-served DOOH markets, LPTV has created a recipe for immediate and long-term success.
And with seasoned management having blue chip experience at leading media brands such as Disney, EA, and Instagram in local and international markets, transforming that recipe into higher revenues is likely to happen faster than many expect. If so, the final product can justify a mighty tasty dish for LPTV investors- higher share prices.
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