- Report highlights Jerrick’s “uniquely low-cost infrastructure and scalable business model” when citing company’s promising potential “to scale profitably, while taking market share from legacy platforms”
- Jerrick balance sheet “much stronger than it appears”
- Company estimated to increase quarterly revenues throughout 2020 and reach an estimated $9 million in revenues in 2021
As part of its mission to shine a light on small or micro-cap companies that are undervalued by Wall Street, renowned research company Zacks Small-Cap Research recently initiated coverage on Jerrick Media Holdings Inc. (OTC: JMDA), a holding company that creates technology products for the creative community (http://ibn.fm/fXO2v). Having concluded that Jerrick’s technology platform Vocal should scale quickly and profitably throughout 2020, Zacks provided a final estimated valuation for the company of $13.00 per share by 2021, calculated using a combination of valuation metrics. This valuation represents a significant increase from the current share price (http://ibn.fm/eoIHo).
“After five years of building its Vocal platform, Jerrick is aiming to disrupt the digital media and publishing platform space,” the Zacks report stated.
Vocal (http://ibn.fm/n3vrw) enables creators to publish media-rich digital content in a safe and secure environment that allows for maximum visibility and the opportunity to be rewarded for their content. Vocal’s revenue model is based primarily on creator and brand subscriptions. Importantly, the report notes, “Vocal does not charge readers and, crucially, is not reliant on the diminishing value proposition of intrusive display advertising.”
In valuing Jerrick, Zacks analyzed the company’s 2019 numbers and balance sheet as compared to a number of public and private comparable companies. Public companies referenced in the report included Spotify (NYSE: SPOT), Shopify (NYSE: SHOP), Etsy (NASDAQ: ETSY), Limelight Networks (NASDAQ: LLNW), and others, while private companies referenced included Patreon, Medium, and VSCO.
Looking at Jerrick’s balance sheet, Zacks noted that the company ended the third quarter with $167,000 in cash reserves, $7.3 million in debt and a negative $8.1 million in working capital. “However, with the current capital raise, this will change drastically,” stated the report, which noted that Jerrick had filed an S-1 outlining the company’s plan for a $6–7 million capital raise and plans for uplisting to the Nasdaq Capital Market. “After the deal, primary shares outstanding should be closer to 12 million. Even without this raise, the balance sheet is much stronger than it appears.”
With a nod at Jerrick’s steadily growing body of over 500,000 Vocal creators (i.e. customers) as well as its ability to engage top brands looking to interact with customers on Vocal, Zacks forecasts favorable conditions for the company’s growth. Jerrick continues to expand Vocal’s product offerings, most recently with the launch of creator Challenges in January 2020 (http://ibn.fm/jiDgN). Challenges enable creators to participate in various themed storytelling contests across a diverse range of topics and interests for the chance to win cash prizes, experiences, and more. Additionally, brands can sponsor Challenges as a way to tap into Vocal’s powerful network of quality creators and highly engaged audiences and generate brand awareness in a valuable and non-invasive way.
In light of this growth as well as future platform expansion plans (http://ibn.fm/WdLgD), “Jerrick should be able to increase quarterly revenues throughout [2020] based on increasing paid subscriber numbers, increased business with brands and continue[d] growth in ecommerce business at Seller’s Choice.”
With respect to its forecasts and valuation for Jerrick, the Zacks report noted, “Based on an industry standard range of 7-21x, enterprise value to sales, Jerrick common stock could be valued at between $62 – $190 million by 2021.” Zacks’ final valuation for the company was set at $13.00 per share by 2021, which they calculated using the averages of the valuation metrics from both of the public and private comparative analysis data.
Given its high scalability evaluation and strong balance sheet, Jerrick poses an attractive option for evaluation by investors looking to break into the burgeoning industry of digital content platforms.
The full report by Zacks Small-Cap Research can be found at http://ibn.fm/AlCPf.
Jerrick Media Holdings Inc. develops technology-based solutions to solve digital problems. Through the combination of design, thought and data analysis, the company builds products that influence a worldwide audience. Jerrick’s flagship product is Vocal, a proprietary long-form digital publishing platform that provides storytelling tools and engaged communities for creators to get discovered and fund their creativity.
Those interested in weekly news from Jerrick can sign up at http://ibn.fm/cfq2J
For more information, visit the company’s website at https://Jerrick.media
NOTE TO INVESTORS: The latest news and updates relating to JMDA are available in the company’s newsroom at http://ibn.fm/JMDA
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