Rumble (RUM): Evaluating Valuation Following Strong Revenue Growth and Improved Six-Month Net Loss

If you have been tracking Rumble (NasdaqGM:RUM), the latest earnings release is hard to ignore. For the second quarter, the company posted another round of revenue growth, up to $25 million from $22 million a year ago. At the same time, investors noted a slightly wider quarterly net loss, along with a meaningful recovery in loss per share and a much smaller net loss over the past six months. The numbers present a mixed snapshot, but still reflect progress toward profitability. This is the kind of detail that tends to shape investor expectations in both directions.

These results come during a volatile year for Rumble. Despite rising sales and shrinking net losses over the half-year, the stock price is down 38% so far this year and has slipped almost 19% in the last month alone. That pullback has occurred even as revenue has grown and losses have shown clear signs of improvement, leading some to wonder whether momentum is pausing or if market risks are beginning to outweigh potential rewards.

With shares at these levels, despite ongoing sales growth, the question remains whether Rumble has already priced in all the upside, or if the current dip presents an opportunity for those focused on future growth.

Most Popular Narrative: 46.8% Undervalued

According to community narrative, Rumble is viewed as significantly undervalued compared to its fair value estimate, as analysts anticipate substantial growth potential driven by key catalysts and bold projections.

*The upcoming launch of Rumble Wallet, with integrated crypto tipping and international payments, is expected to increase global user acquisition and drive engagement by reaching new markets. In regions where decentralized, creator-driven monetization is highly valued, this could help accelerate top-line revenue growth and expand the platform's total addressable market.*

Interested in seeing the data behind this outlook? Analysts are predicting surprising double-digit growth and a margin turnaround that is unusual in this sector. What is contributing to the notable gap between the current share price and projected value? Explore the full story to learn more about the forecast influencing this positive target.

Result: Fair Value of $14.5 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistently high infrastructure costs and potential delays in scaling the AI and cloud business could weaken Rumble's ambitious growth outlook.

Find out about the key risks to this Rumble narrative.

Another View: Is the DCF Model Telling a Different Story?

Looking at our DCF model, a different picture emerges. Unlike the upbeat forecasts built on sales multiples, the DCF approach signals the shares are still trading above fair value. This raises the question of whether this method captures overlooked risks or if it is too conservative.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Rumble for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Rumble Narrative

If you think there is more to the story or want to follow your own path, you can easily put together your own narrative in just a few minutes. So why not do it your way?

A great starting point for your Rumble research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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