Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having an overwhelmingly positive start to the trading session today, and for good reason. The company released an update with regard to the number of subscribers that are taking advantage of MoviePass, which has beat expectations. Of course, this is leading to excitement among investors and sending the stock screaming toward the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:28), HMNY is trading at $16.60 per share after a gain of $3.38 per share (25.41%) thus far today.
HMNY Explodes On Strong MoviePass Growth
As mentioned above, Helios and Matheson Analytics is having an overhelmingly strong day in the market today after the company announced that its MoviePass subscriber base is growing at a faster rate than expected. In their press release, HMNY said that paying subscribers have now surpassed 600,000 as of October 18th. This is up from about 20,000 on August 14th, the day before the company acquired a majority stake in the product.
Moving forward, HMNY expects that MoviePass will continue to grow at an incredible rate. In fact, as a result of the strong growth seen in the first couple of months that the company has had the majority stake in the product, the company is expecting that growth will continue at this rate or better, leading to more than 1 million paying subscribers before the end of the year.
Another bit of data that the company announced is a declining churn rate. During the first month, the churn rate on MoviePass subscribers was 4.2%. However, in the second month, the churn rate reduced to only 2.4%. Considering this, monthly subscriber retention is currently above 96% and Helios and Matheson Analytics expects that the average life expectancy of a subscriber on the service is 46.8 months. In a statement, Mitch Lowe, CEO at MoviePass, had the following to offer:
“Month after month we aim to improve our service with faster card delivery, improved application updates, and an easier-to-use web site. WE believe our strategy is paying off in terms of increased satisfaction, reduced churn, and faster growth…I believe our ongoing investments in customer experience, usability and convenience have steadily improved customer satisfaction and retention.”
The above statement was followed up by Ted Farnsworth, Chairman and CEO at HMNY. Here’s what he had to offer:
“When you apply computer science and machine learning to an industry that we believe has lacked significant innovation, useful patterns start to emerge… More subscribers mean more data. Together, I believe HMNY and MoviePass can offer important analytics to movie studios and exhibitors while serving the interests of moviegoers in the process.”
What All Of This Means For HMNY
If you’ve been following HMNY in recent weeks, you know that the stock has had a rough time as of late. With many belittling the profitability of MoviePass, investors just aren’t sure about the company. Nonetheless, I assure you that today’s news is overwhelmingly positive. Ultimately, this means several positive things for the company:
- Improved Revenue – With revenue coming from an additional 200,000+ new subscribers to MoviePass, the next earnings report is likely to produce some surprising figures.
- Improved Data – Farnsworth has made it clear that the value of MoviePass isn’t necessarily in the monthly fee to subscribers, but in the data produced through the service. In fact, Helios and Matheson Analytics plans to sell this data to various entities, not only in the movie industry, but also to companies like Uber, restaurants, and many more. As the subscriber base grows, this data becomes more and more valuable.
- More Cross-Selling – Finally, considering the popularity of MoviePass, HMNY now has the ability to cross sell other products to the subscriber base. For example, it now has the attention of more than 600,000 subscribers that can be considered warm leads for RedZone Maps and any other service the company creates in the future.
All in all, what the growth in MoviePass is doing is creating an opportunity for HMNY to grow dramatically!
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on HMNY. In particular, we’re going to be following the growth of MoviePass closely as well as the company’s plans to sell the data generated through the service. We’re also interested in seeing whether or not the company will start cross-selling to its user base, as we believe that the potential opportunity here could be massive. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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