Below is a summary of Pareto´s new research on Linkfire from last week:
- “Linkfire is currently down ~67% since its IPO, and is down around 47% YTD. Valuations for Linkfire’s peers have also traded down significantly, but we believe Linkfire is undervalued at current levels”
- Pareto estimates the revenue growth to accelerate from 36% in 2021 to 51.4% in 2022
- Last year Apple music was the major revenue contributor. Last week Linkfire signed up Amazon music. The revenues from the deal will be already visible in 2Q22.
- Pareto believes that the Amazon Music deal by should help for the commission based revenues to double in 2022 vs 2021.
- Other major streaming platforms are not yet Linkfire partners (Spotify, Tencent Music, or YouTube Music. Linkfire is maintaining dialogue with all major players. Amazon deal should accelerate for the other streaming platform to sign up a similar deals with Linkfire.
- Pareto research quotes:
- Linkfire is one of the more attractive venues for music streaming providers to turn to when they want more subscribers. Furthermore, now that that two of the key challengers to Spotify (Apple Music and Amazon Music) are Linkfire affiliates, we believe this could further push the other challengers to partner up with Linkfire.
- This deal greatly increases our confidence that Linkfire can reach its FY2022 revenue guidance… (51% yoy revenue growth)
- In our view, the stock should be able to trade up if the company manages to deliver on its guidance during FY2022, and as the understanding and awareness of Linkfire, its business model and opportunity grows in the market.
- We believe 1Q22 will be one of the best quarters in Linkfire history, beating the revenue guidance of 51% revenue growth. Could be a major catalyst for the stock.
- Linkfire is reporting on 25/5.
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