Company Overview
Cheer Holding, Inc. operates as a provider of advertisement and content production services specifically within the People's Republic of China, utilizing a business model that spans both digital and traditional media channels. The company is categorized within the Communication Services sector and the Advertising Agencies industry, indicating its focus on media distribution and creative content generation for clients in the Chinese market. Cheer Holding, Inc. currently maintains a market capitalization of $3.85M and employs 116 individuals to execute its operations across two primary segments: Cheers APP Internet Business and Traditional Media Businesses. With annual revenue recorded at $148.84M, the company's market cap and revenue figures suggest a small-cap position that generates significant top-line volume relative to its size, highlighting a potential divergence between valuation multiples and operational scale.
Financial Health
The company reported a trailing twelve-month revenue of $148.84M alongside a net income of $25.62M and an EBITDA of $33.17M, revealing a cost structure where operating expenses consume approximately 82.9% of revenue before interest and taxes. The free cash flow stands at $2.93M, which represents a significant portion of the total cash balance of $242.08M, indicating that the company retains substantial liquidity beyond its immediate operational cash generation. Profitability is reflected in a gross margin of 71.0%, an operating margin of 23.1%, and a profit margin of 17.2%, demonstrating that the business model successfully converts a large share of revenue into profit after covering the cost of goods sold and operating expenses. On the balance sheet, total cash of $242.08M vastly exceeds total debt of $9.45M, while a debt-to-equity ratio of 2.56 suggests a leveraged capital structure where equity financing outweighs debt obligations in the denominator of the calculation. The current ratio is 11.53, a figure that indicates a highly conservative short-term liquidity position with assets more than eleven times the value of current liabilities. Return on Equity is 7.6% and Return on Assets is 4.4%, metrics that reveal the effectiveness of management in generating profits from shareholder equity and total asset base respectively, though the ROA indicates asset efficiency is moderate relative to the high equity returns.
Valuation Assessment
The trailing P/E ratio is 0.03, while the forward P/E is N/A, implying that the market is currently pricing the stock based on historical earnings rather than projected growth expectations due to the lack of available forward consensus estimates. The price-to-book ratio is 0.01, indicating that the market values the company at a fraction of its book value, which suggests a significant discount or potential undervaluation relative to its tangible assets. Alternative valuation metrics include a price-to-sales ratio of 0.03 and an EV/EBITDA of -6.88, figures that suggest the market is applying a highly compressed multiple to the company's sales and enterprise value adjusted earnings. The 52-week high is $104.50 and the 52-week low is $0.80, meaning the current price sits at a level that reflects extreme volatility and is trading significantly below the recent peak of the trading range. The beta value is 1.06, which means the stock's price volatility is slightly higher than the broader market average, moving 6% more than the market index in response to general market movements.
Growth & Income
Revenue growth year-over-year is 2.2%, whereas earnings growth year-over-year is -85.3%, indicating that earnings are contracting at a much faster rate than revenue expansion, which implies rising costs or a one-time impairment affecting net income disproportionately. The company does not pay dividends, as evidenced by a dividend yield of N/A and a payout ratio of 0.0%, meaning that all generated earnings are retained within the business rather than distributed to shareholders. This reinvestment strategy prioritizes internal growth and balance sheet strengthening over immediate income distribution to investors. Overall, the growth and income profile presents a scenario of moderate revenue stability coupled with significant earnings contraction and a complete absence of dividend income, focusing entirely on capital preservation and potential future operational scaling.
Peer Comparison
Cheer Holding, Inc. (CHR) operates in the Advertising Agencies industry. Here is how it compares to its closest peers by market capitalization:
The Advertising Agencies industry average P/E ratio is 34.7x. Cheer Holding, Inc. trades at a P/E of 0.0.