Rumble (RUM) Hua Yuan Zheng Quan·2025-03-02 14:04Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [5][7]. Core Insights - Rumble is positioned as a challenger to major tech monopolies, promoting a fair and free video platform. The company has seen significant growth potential through advertising revenue driven by Monthly Active Users (MAU) and Average Revenue Per User (ARPU) [5][7]. - The strategic investment of $775 million from Tether, a leading stablecoin company, is expected to enhance Rumble's growth and expansion plans [5][7]. - The company is focusing on diversifying its revenue streams, including cloud services and cryptocurrency integration, which are anticipated to provide additional growth avenues [5][7]. Summary by Sections Market Performance - As of February 26, 2025, Rumble's closing price was $9.18, with a market capitalization of $3.6 billion and a total share count of 390 million [3]. Financial Projections and Valuation - Revenue forecasts for 2024-2027 are projected at $94.1 million, $180.9 million, $420.0 million, and $1.188 billion respectively, with corresponding net profits of -$115.9 million, -$0.3 million, $56.2 million, and $216.2 million [6][7]. - The Price-to-Sales (P/S) ratios for the same years are expected to be 38.01, 19.77, 8.51, and 3.01 [6][7]. Key Assumptions - The monetization of revenue is based on the product of quarterly ARPU and average MAU, with expected ARPU growth rates of -6%, 35%, 60%, and 80% from 2024 to 2027 [8]. - MAU is anticipated to grow at rates of 15%, 50%, 50%, and 60% over the same period, driven by increased content creator engagement and political events [8]. Investment Logic - Rumble's commitment to a free speech platform has attracted a unique user base, and its advertising revenue is expected to benefit from both MAU and ARPU growth [7][8]. - The company is leveraging its cloud services to ensure data autonomy and expand its service offerings, which is expected to enhance its competitive position [7][8]. - The partnership with Tether is set to facilitate the integration of cryptocurrency payment options, providing content creators with diverse income sources [7][8].