PARA Stock Plunges 31% in a Year: Should You Buy, Sell or Hold?

Core Viewpoint - Paramount Global's share price has significantly underperformed compared to its sector and industry, with a 31.1% decline over the past year, while the Zacks Consumer Discretionary sector and Zacks Media Conglomerates industry returned 12.9% and 20.7%, respectively [1] Paramount+ Performance - Paramount+ revenues increased by 25% year over year in Q3 2024, driven by a subscriber increase of 3.5 million, reaching a total of 72 million, and an 11% rise in global average revenue per user (ARPU) [3] - Paramount+ is expected to be a key growth driver for the company in 2025, supported by its expanding subscriber base and revenue growth [10] - The service launched a significant lineup of shows, including popular series that achieved top streaming rankings, with "Tulsa King" setting a record for the most-watched global debut in Paramount+ history [11] Financial Performance - The company reported a 6% year-over-year revenue decline to $6.73 billion in Q3 2024, missing the Zacks Consensus Estimate of $6.91 billion, primarily due to weaknesses in the TV Media and Filmed Entertainment segments [9] - The Direct-to-Consumer (DTC) segment saw a 10% year-over-year revenue increase to $1.86 billion in Q3 2024, with DTC advertising revenues rising by 18% [20] - The consensus estimate for fourth-quarter revenues is projected at $8.12 billion, indicating a year-over-year growth of 6.3% [14] Subscriber Growth and Market Position - Paramount+ is expanding internationally, particularly in emerging markets, with "South Park" being a significant hit for subscriber growth and engagement [18] - CBS live news channels experienced a 78% year-over-year increase in minutes viewed, and CBS averaged over 20 million viewers during the first five weeks of the 2024 NFL season [5][25] Future Outlook - The consensus estimate for earnings per share is $1.79, reflecting a 16.2% upward revision over the past 60 days, indicating a year-over-year increase of 244.2% [7] - The long-term earnings growth rate for the company is pegged at 20%, with shares appreciating 68.3% year to date [22]