PARA is deeply undervaluedSince Archegos got margin called, Paramount shares have declined over 80% from ATH. PARA is now trading at a P/E below 4 and at roughly half its book value.
Paramount has been transitioning to streaming, and Paramount + has been rapidly gaining subscribers and revenue, but the main causes for concern have been its high debt, and the decline of its cable TV business. On the recent earnings report, PARA continued to show excellent growth in its revenues, but missed earnings due to increased operating expenses and restructuring expenses. With inflation making everything more expensive, increased expenses are unsurprising, and I view that the market has overreacted in selling PARA.
I am acquiring shares whenever the stock drops 2 standard deviation below the VWAP, and intend for this to be a long term play.
