Should you buy CuriosityStream shares after an upbeat JPMorgan update?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Sep 17, 2021
  • CuriosityStream shares on Friday spiked more than 10% after JPMorgan issued an upbeat report.
  • The firm initiated coverage of CURI shares with an overweight rating and a price target of $15.00 per share.
  • They cited its growing subscribers as a major catalyst for the rating.

On Friday, CuriosityStream Inc. (NASDAQ:CURI) shares surged more than 10% after JPMorgan analysts initiated coverage with an overweight rating. Moreover, the analysts issued a price target of $15.00 per share, implying a 35% upside potential from Thursday’s closing price of $11.07.

JPM pointed to the company’s direct subscriber growth amid a slowdown in bundled subscribers. In addition, they also pointed to its low-cost content model as a significant catalyst for bottom-line growth.

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CuriosityStream shares are down more than 25% this year, and up 22% over the last 12 months. As a result of JPM’s upbeat report, the stock could gain ground to trim this year’s losses.

Is it time to invest in CuriosityStream shares?

From a valuation perspective, CuriosityStream shares trade at a reasonable price-sales ratio of about 9.85. However, the company is yet to swing to profits on a trailing 12-month basis, making it a tough selection for value investors.

Nonetheless, with analysts expecting its earnings per share to grow by 68.20% this year and 52.30% next year, it could be closer to turning a profit. As a result, CURI shares could be attractive to growth investors willing to overlook short-term instability.

Therefore, this year’s decline coupled with the latest analyst coverage could create the perfect opportunity to buy.

Source – TradingView

Can CURI break above the 100-day MA and out of the triangle formation?

Technically, CuriosityStream shares seem to be facing some resistance from the 100-day moving average in the intraday chart. In addition, the stock also appears to be trading within a consolidative triangle formation, moving closer to a breakout.

Therefore, with the stock yet to reach the overbought conditions despite Friday’s spike, there could be still time to buy the rebound. As such, investors can target extended gains at approximately $13.92 or higher at $15.41. On the other hand, if the 100-day MA resistance remains solid and pushes the stock price lower, the pullback could find support at $10.57 or lower at $8.97.

Bottom line: is there time left to buy the CURI spike?

In summary, Friday’s spike may seem to have sailed for those who did not buy. However, the stock is yet to reach overbought conditions, leaving more room for investors to buy. Moreover, although shares do not look undervalued, the exciting earnings growth prospects make the stock an interesting buy for growth investors. 

Therefore, there could be still time to invest in CURI shares despite Friday’s spike.

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