National CineMedia (NASDAQ:NCMI) Rating Lowered to Strong Sell at Zacks Research

Key Points

• Zacks Research downgraded National CineMedia to “strong sell” from “hold,” adding to a mixed analyst outlook. The stock has an average “hold” rating and a consensus price target of $4.81, although recent targets range from $4.25 to $5.00.
• National CineMedia reported a quarterly loss of $0.10 per share, missing the $0.09-loss estimate, while revenue of $58.4 million also fell short of the $59.34 million consensus.
• Shares opened at $2.22, near the company’s 52-week low of $2.16 and below both its 50-day and 200-day moving averages, underscoring recent weakness in the stock.

National CineMedia (NASDAQ:NCMI - Get Free Report) was downgraded by investment analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a research note issued to investors on Tuesday,Zacks.com reports.

Several other research analysts have also recently weighed in on the company. Wall Street Zen raised National CineMedia from a "strong sell" rating to a "sell" rating in a research report on Saturday, June 6th. Weiss Ratings restated a "sell (d+)" rating on shares of National CineMedia in a research report on Friday, August 7th. Barrington Research set a $4.25 price objective on shares of National CineMedia in a report on Wednesday. Finally, Wedbush set a $5.00 price objective on shares of National CineMedia and gave the stock an "outperform" rating in a research report on Wednesday. Three research analysts have rated the stock with a Buy rating, one has issued a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat, the company currently has an average rating of "Hold" and a consensus price target of $4.81.

National CineMedia Price Performance

National CineMedia stock opened at $2.22 on Tuesday. National CineMedia has a 52 week low of $2.16 and a 52 week high of $5.03. The company's 50 day moving average price is $3.76 and its two-hundred day moving average price is $3.50. The stock has a market cap of $208.19 million, a P/E ratio of -24.66 and a beta of 1.38. The company has a quick ratio of 1.82, a current ratio of 1.82 and a debt-to-equity ratio of 0.03.

National CineMedia (NASDAQ:NCMI - Get Free Report) last released its earnings results on Tuesday, August 11th. The business services provider reported ($0.10) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.09) by ($0.01). The business had revenue of $58.40 million during the quarter, compared to the consensus estimate of $59.34 million. National CineMedia had a negative net margin of 3.05% and a negative return on equity of 1.29%. On average, equities analysts predict that National CineMedia will post -0.01 earnings per share for the current year.

Insiders Place Their Bets

In related news, insider Maria Vg Woods sold 12,058 shares of National CineMedia stock in a transaction dated Thursday, July 2nd. The stock was sold at an average price of $3.77, for a total value of $45,458.66. Following the completion of the sale, the insider owned 163,162 shares of the company's stock, valued at approximately $615,120.74. This trade represents a 6.88% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Company insiders own 1.70% of the company's stock.

Hedge Funds Weigh In On National CineMedia

Several large investors have recently modified their holdings of the business. Quantbot Technologies LP purchased a new stake in shares of National CineMedia during the 3rd quarter valued at approximately $34,000. Graham Capital Management L.P. purchased a new position in National CineMedia in the 4th quarter valued at approximately $40,000. Strs Ohio purchased a new position in National CineMedia in the 1st quarter valued at approximately $43,000. NewEdge Advisors LLC bought a new stake in National CineMedia during the 1st quarter valued at $44,000. Finally, Jump Financial LLC purchased a new stake in shares of National CineMedia during the fourth quarter worth $53,000. Hedge funds and other institutional investors own 69.49% of the company's stock.

National CineMedia News Summary

Here are the key news stories impacting National CineMedia this week:

• Positive Sentiment: National CineMedia agreed to acquire Captivate Holdings for $275 million, expanding beyond movie-theater advertising into digital video and out-of-home advertising in office buildings, apartment complexes and other venues. Management expects the transaction to create a broader premium advertising platform and potentially improve long-term growth and diversification. National CineMedia to Acquire Captivate
• Positive Sentiment: Second-quarter revenue increased approximately 12.7% year over year to $58.4 million. The company also reported $18.1 million in operating cash flow, $46.1 million in cash and modest capital spending, providing some liquidity to support the transaction. National CineMedia Q2 Earnings
• Neutral Sentiment: Management outlined acquisition financing that would leave National CineMedia at roughly 3.9 times net leverage at closing. The deal could strengthen the company’s market position, but execution, integration and debt-reduction plans will be important for investors to monitor. NCMI Captivate Financing
• Negative Sentiment: National CineMedia paused its dividend to help fund the Captivate acquisition. The lost shareholder income, combined with the higher leverage required for the purchase, triggered the sharp negative market reaction and raises concerns about financial flexibility. National CineMedia Dividend Suspension
• Negative Sentiment: Second-quarter results fell short of expectations: adjusted EPS was a $0.10 loss versus the anticipated $0.09 loss, while revenue missed estimates of $59.34 million. National CineMedia also posted a $12.8 million operating loss and a $9.9 million net loss attributable to common shareholders. National CineMedia Q2 Results

National CineMedia Company Profile

National CineMedia, Inc is a leading U.S. out-of-home media company specializing in cinema advertising. The firm operates a proprietary network that delivers high-impact advertising content to moviegoers across a broad footprint of theaters, offering brands a targeted and immersive way to engage audiences in a captive, distraction-free environment.

Founded in 2003 and headquartered in Centennial, Colorado, National CineMedia began as a joint venture among several major exhibition chains.

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