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Comments on Catena Media Q3 Report 2019

Companies / Corporate Earnings Nov 19, 2019 - 01:20 PM GMT

By: Submissions

Companies

Catena Media just released its Q3 report and in this article will give a few comments about the report and the outlook for the future. First we like to give some background information about the company for those who does not know about the company. Catena Media was founded in 2012 by two Swedish entrepreneurs. The company went public in 2016. The business mainly consists of websites that drives traffic to gambling and financial related websites. It can be a casino comparison website, betting tips portals, websites to compare private loans and so on.

During the first years that company did extremely well on the stock market and in financial terms but during the last quarters the growth and stock as steadily decreased. The growth started to decline at a fast pace and the business is still decreasing on a year to year basis but has turned around on a quarterly basis. It will be an interesting time ahead to see if Catena Media can turn this around or if the growth will continue to decline. Continue reading to learn more about if Catena Media could be a good to invest your money in.


catenamedia.jpg

What are the positive signals for Catena Media?

The positive signals from Catena Media comes mainly from the US market and the Japanese market. Historically the company has been very strong in the UK and Swedish market but these two markets are becoming increasingly tough and the competition is hard. In the USA new states are opening up and the customers value is among the best in the world. From being a few percent of the total revenue last year to being 17% of the revenues in Q3 2019 the growth in the USA is very good. Especially in the sports betting vertical. If the company can keep their momentum and continue to grow with new states and gambling sites, the company can perform really well within a couple of years.

What are the challenges?

There are many challenges for a lead generating company (often named affiliate). Especially the competition can be very rough. In the old main markets Sweden and UK new websites are popping up all the time and seems to be tough to keep up with all new Google updates. Many award winning companies such as Casino Bonus UK are expanding their business and taking market share. The UK Gambling Commission is also talking about introducing new laws and regulations which makes the UK, a market that not many gambling companies want to invest in. This results in that there are way more casino comparison websites opening up and less new online casino. Not a good situation for Catena Media.

In the USA, Catena Media are one of the best affiliates in the gambling niche. There is currently not much negative so say about the situation in the US. The problem that can occur is that they already have all leading position on Google search. The business for each state must be growing and/or more states to opening up the growing potential is not that big. Luckily for Catena Media it seems like many new states will open up and online revenue from each state is increasing. So the challenge will be to keep the top ranking with the tough competition coming in.

On a side note, Catena Media has also focused on CPA (cost per acquisition) which gives the company a fixed fee for each referred depositing players. With the growth in CPA as part of the total revenue the long-term risk is also higher than a company with a high percentage of revenue sharing deals.

Summary

To sum up, the company has shown that it can be a turn around case but it is too early to say if the numbers will continue to grow in the next quarters. For the defensive investor it is probably better to wait one or two quarters before making an investment. For the risk taker it could be a good opportunity to take a position at this point and hope that the future looks promising. It is always be thinking about the diversification when building a portfolio for the long term and always make sure to do your own analysis before making an investment. In regards of the success in Catena Media it is basically a bet on if the USA will be successful or not. What do you think?

By Anders

Copyright © 2019 Anders - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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