Trading at one third the book value with a market cap that matches their cash position

Trading at one third the book value with a market cap that matches their cash position
Look at How Grom Social (GROM) is Increasing Their Revenues by Triple Digits in 2022 and Laying the Ground Work to do the Same in 2023

Trading at one third the book value with a market cap that matches their cash position.

GROM has a very similar setup to our biggest winner in June which ran 236% yesterday!

Good day everyone,

We want to update you on Grom Social Enterprises, Inc. (NASDAQ: GROM) the social media company just for kids, and a creator of media content for animated films and televisions series.

Current price $.44/share (at market close 6-27-22)

As I said earlier I was excited to prepare this updated report on GROM. Not only has the company laid the groundwork to be a significant provider of children’s media content with an impressive IP portfolio, but their share price is also lower than it’s been since I began coverage, and I don’t expect it to stay this low for long.

I wanted to update these statistics on GROM because they really illustrate how oversold the shares are. Note the relationship between market cap, revenues, and cash position, as well as the book price.

FYE 12-31, MRQ 3-31-22
Outstanding shares 18.7M
Shares in float 15.5M
Market cap $8M
Revenues (FYE21) $6.2M
Cash (mrq) $6.27M
Book value (mrq) $1.33/share
Price on May 31, 2022, $.79/share

While GROM has four operating segments, only two are currently generating revenues with Top Draw, a producer of animation product, being the biggest revenue producer by far. In the past two months, Top Draw has booked $2.97M in new business, a new contract was just announced this week, representing almost half the company’s 2021 revenues.

Also contributing to FYE 2022 revenues for Top Draw are the contracts for $2M they booked in Q421 and the $950K booked in Q122. The backlog described above would equal their FYE 2021 revenues and we are just finishing H1 2022, meaning Top Draw could surpass last years revenues significantly in 2022.

The other segment contributing to GROM revenues is GROM Educational Services, a web filtering service offered primarily to schools, which generated 2021 revenues of $594K and I don’t expect that segment to grow revenues significantly.

I still think the GROM segment Curiosity Ink Media will become the largest contributor to revenues in H2 2022 and FYE 2023. Curiosity is building an impressive media IP portfolio the includes books, and animated series as well as movies. They have brought in impressive creative and development talent to that end. The commercialization of that IP portfolio could begin in H2this year.

Curiosity will also launch santa.com this fall. Read this press release to learn more about the website. Santa.com will become the company’s digital online hub, where kids and adults can shop and experience the holiday season in a one-stop, modern update of the classic department store. Santa.com places Grom, and Curiosity squarely in the booming trillion-dollar holiday e-tail business.

Santa.com will be offering products developed through its partnership with Cepia LLC to serve as licensing agent for the hit toy and entertainment franchise, Cats vs Pickles. The Cats vs Pickles brand has established appeal among global fans with collectible bean-filled toys, popular YouTube animated shorts and a hyper-casual app game.

Given their new contracts and backlog, I expect Top Draw may exceed their prior year revenues this year by a wide margin. Curiosity, while still in its nascent stages, could be the factor that drives GROM into triple digit revenues gains. Curiosity has brought in top notch marketing talent to promote santa.com and market their e-commerce platform products in the upcoming holiday season. The potential for revenues in holiday product sales is virtually unlimited.

Curiosity has assembled a team to develop their media content IP portfolio that is experienced and have established records of success. The exploitation of that IP portfolio could yield a significant and ongoing revenue stream in the multi-billion-dollar children’s media market. GROM has a lot of irons in the fire, and they will generate revenues that may propel the company into triple digit growth.

GROM is currently at an irresistible price level trading at less than one-third of the most recent book value. The current RSI (14) is an exceptionally low 30.42 and the current market cap is below the level I anticipate for 2022 revenues.

Stay tuned for more on GROM,

The Traders News Team

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