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Buy, Sell, Or Hold RUM Stock At $13?
RUMRumble (RUM) Forbes·2024-12-24 13:52

Core Viewpoint - Rumble Inc. has experienced a significant stock price surge of 81% following Tether's announcement of a 775millioninvestment,whichincludesaself−tenderofferandfundsforgrowthinitiatives[1][2].FinancialPerformance−Rumble′srevenuehasincreasednine−foldfrom775 million investment, which includes a self-tender offer and funds for growth initiatives [1][2]. Financial Performance - Rumble's revenue has increased nine-fold from 9.5 million in 2021 to 86millioninthelasttwelvemonths[3].−Thecompanyreportedanoperatinglossof86 million in the last twelve months [3]. - The company reported an operating loss of 143 million on sales of 86 million for the last twelve months, indicating ongoing financial challenges [3]. - Rumble's SG&A expenses are high at 65% of revenue, which further impacts profitability [3]. User Engagement and Growth Potential - Monthly active users (MAUs) peaked at 80 million by the end of 2022 but fell to 44 million in Q2'23 before rising to 67 million currently [3]. - The average revenue per user (ARPU) stands at 0.33, highlighting the need for improvement in user engagement and monetization strategies [3][2]. - The proposed 250millioninvestmentingrowthinitiativesaimstoenhanceuseracquisitionandimproveARPU,potentiallyreducinglosses[2].CompetitiveLandscape−Rumblefacesintensecompetitionfromothervideo−sharingplatformssuchasBitChute,Odysee,andYouTube,makingitchallengingtoretainusersandattracthigh−profilecontentcreators[5].StockValuation−Followingtherecentstockpriceincrease,Rumble′sstockistradingat31timestrailingrevenues,whichisconsideredhigh[6].−Theaveragerevenuegrowthrateisestimatedtobeinthehighteensoverthenextfewyears,withforwardsalestradingat23timesexpected2025revenuesofaround250 million investment in growth initiatives aims to enhance user acquisition and improve ARPU, potentially reducing losses [2]. Competitive Landscape - Rumble faces intense competition from other video-sharing platforms such as BitChute, Odysee, and YouTube, making it challenging to retain users and attract high-profile content creators [5]. Stock Valuation - Following the recent stock price increase, Rumble's stock is trading at 31 times trailing revenues, which is considered high [6]. - The average revenue growth rate is estimated to be in the high teens over the next few years, with forward sales trading at 23 times expected 2025 revenues of around 113 million [6].