Regulatory Risks And Competition Will Limit Revenue But B2B Will Revive

Key Takeaways

• Heavy reliance on niche branding and creator incentives may pressure margins amid rising regulatory and content moderation risks.
  
• Growth is challenged by intense competition and advertiser hesitation, limiting mainstream appeal and potential revenue scale.
  
• Rumble's focus on rapid growth over profitability increases financial risk, while platform concentration, regulatory pressures, and fierce competition threaten its long-term expansion and monetization.

Catalysts

Operates video sharing platforms and cloud services in the United States, Canada, and internationally.

• While the rise in demand for alternative online platforms and the Rumble Wallet launch could fuel international user growth and increase overall revenue, the company's reliance on free speech branding exposes it to escalating regulatory scrutiny and potential compliance costs, which could erode net margins over time.
  
• Although Rumble's digital ad revenues and partnerships such as those with Cumulus Media, Tether, and PubMatic suggest more monetization opportunities from digital ad spend shifting away from traditional channels, advertisers' cautiousness due to concerns around misinformation and content moderation could cap CPM growth and slow earnings acceleration.
  
• While growing global internet access and mobile adoption theoretically expand Rumble's addressable market, the platform's concentration in certain political and social niches creates risks of user churn and limits mainstream appeal, which may constrain long-term top-line growth.
  
• Despite Rumble Cloud and proposed AI integrations positioning the company for higher-margin B2B revenues and operational leverage, entrenched competition from incumbents like YouTube, Meta, and TikTok-with their AI-driven personalization and vast resources-poses a significant threat to Rumble's ability to scale revenue and improve profitability sustainably.
  
• Although recent improvements in creator monetization tools and the integration of crypto tipping may attract creators and drive gross profit improvements, heavy spending on creator incentives and expanding infrastructure could pressure net margins, especially if user growth and monetization do not scale as planned.

Rumble Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more pessimistic perspective on Rumble compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
• The bearish analysts are assuming Rumble's revenue will grow by 20.9% annually over the next 3 years.
• The bearish analysts are not forecasting that Rumble will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Rumble's profit margin will increase from -289.4% to the average US Interactive Media and Services industry of 11.0% in 3 years.
• If Rumble's profit margin were to converge on the industry average, you could expect earnings to reach $20.2 million (and earnings per share of $0.05) by about August 2028, up from $-301.2 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 232.8x on those 2028 earnings, up from -8.9x today. This future PE is greater than the current PE for the US Interactive Media and Services industry at 13.9x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.01%, as per the Simply Wall St company report.

Rumble Future Earnings Per Share Growth

Risks

• Rumble's aggressive pursuit of growth over profitability, highlighted by management's deprioritization of adjusted EBITDA breakeven and continued cash burn, raises the risk of sustained operating losses and diluted shareholder value, which could weigh on long-term earnings per share and net margins.
  
• The platform's user base remains heavily concentrated in the U.S. and politically aligned communities, and significant reliance on a handful of influential creators like Dan Bongino means any major departures risk reducing engagement, advertiser interest, and revenue growth, potentially stalling expansion of the total addressable market.
  
• Rumble's partnership-driven growth and efforts to integrate crypto payment solutions introduce heightened regulatory risks, given increasing scrutiny over content moderation, data privacy, and fintech activities, which could result in higher compliance costs and limit potential advertising and monetization opportunities, thereby impacting future revenues.
  
• Intense competition with digital incumbents such as YouTube, Meta, and TikTok, all of which are increasing their use of AI-driven discovery, personalization, and ad technology, may limit Rumble's ability to capture mainstream audiences and lucrative advertiser demand, capping long-term revenue potential.
  
• The possibility of overextending capital on M&A and ambitious cloud and AI infrastructure expansion, without clarity on monetization or defensive moats, exposes Rumble to high execution risk, ongoing negative cash flow, and potentially permanent pressure on net margins and return on invested capital.

Valuation

• The assumed bearish price target for Rumble is $9.0, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Rumble's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $20.0, and the most bearish reporting a price target of just $9.0.
  
• In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $183.7 million, earnings will come to $20.2 million, and it would be trading on a PE ratio of 232.8x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $7.9, the bearish analyst price target of $9.0 is 12.2% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.