Strong Q1 Performance#
Benchmark has reiterated a Buy rating for Paramount Skydance (NASDAQ:PSKY) after the company reported its first-quarter fiscal 2026 results, which exceeded expectations across all key metrics. The firm has set a price target of $19.00, indicating significant potential growth from the current stock price of $10.53. Analysts suggest that the stock is undervalued compared to its Fair Value estimate. They predict that Paramount Skydance will be profitable this year, with earnings per share expected to reach $0.70 for fiscal 2026.
Subscriber Growth#
During the quarter, Paramount Skydance added 700,000 net subscribers, even after implementing a recent price increase. Benchmark attributes this growth to the popularity of UFC content and the overall value of its content offerings.
Pluto's Recovery#
The company’s ad-supported streaming platform, Pluto, has shown signs of recovery, with improved user engagement metrics. This turnaround is seen as a positive development for the platform, which had previously struggled.
Future Outlook#
Despite the strong performance in the first quarter, Paramount Skydance has maintained its full-year guidance, which is expected to be more heavily weighted towards the latter half of fiscal 2026. Benchmark noted that the stock may remain stable until there are new developments regarding potential mergers and acquisitions, especially due to concerns about antitrust issues.
In recent news, Paramount Skydance reported a revenue of $7.35 billion for the first quarter, a 2% increase from the previous year, and an adjusted EBITDA of $1.16 billion, up 59% year-over-year. These results surpassed consensus expectations, indicating robust financial health. Additionally, the company has declared a quarterly dividend of $0.05 per share for 2026. However, more than 1,000 industry professionals have expressed opposition to the proposed merger with Warner Bros. Discovery, citing worries about reduced opportunities in the entertainment sector.