Analyst Confident In Helios And Matheson Thanks To MoviePass

Between its $60 million capital raise, MoviePass’s revenue deal with an independent distributor and the striking of 1 million MoviePass subscribers, Helios and Matheson Analytics Inc (NASDAQ: HMNY) had a good December.

The Rating

Maxim Group analyst Brian Kinstlinger reiterated a Buy on Helios and Matheson with a $25 price target.

The Thesis

Kinstlinger’s confidence is anchored in MoviePass. The division's promotional agreement with a yet-undisclosed film distributor is considered proof of industry influence and the start of a wider trend, the analyst said. (See Kinstlinger's track record here.) 

“We expect more distributors and national theater chains will be more open to partnering with MP as its subscriber base is on track to grow to several million in 2018,” Kinstlinger said. 

MoviePass’s partnership with Costco Wholesale Corporation (NASDAQ: COST) affirmed the analyst’s faith in a second-quarter milestone of 2 million subscribers, he said. 

Access capital remains the "most significant risk," Kinstlinger said. 

“With this capital raise and further investment into MoviePass, we estimate HMNY now owns about 62 percent of MoviePass,” he said. “We estimate this offering gives MoviePass an estimated seven months of cash to finance over usage by members.”

Price Action

At time of publication, Helios and Matheson was trading down 3.6 percent at $6.97. 

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