Please ensure Javascript is enabled for purposes of website accessibility

Why Eros International Stock Is Climbing Higher Again Today

By Jon Quast – May 8, 2020 at 1:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's partnership with Visa could drive subscriber growth in India.

What happened

Shares of Eros International (ESGC) were climbing higher on Friday after announcing a new partnership with Visa (V -0.98%) in India, strengthening its leadership position in the country. As of 1:00 p.m. EST, the stock was up 8%. But it had traded 18% higher at one point.

The Visa partnership is the only news specific to Eros explaining the stock's move. However, it's possible investors are sending the stock higher due to strong results from other media companies this week.

A man in a suit draws an upward arrow on a transparent touchscreen with his finger.

Image source: Getty Images.

So what

Eros International offers a top streaming service in India called Eros Now. With its new partnership, Visa cardholders in India can subscribe to Eros Now for half the regular price. The platform had 26.2 million paying subscribers as of the third quarter of fiscal 2020. Considering India's population is over 1.3 billion, there's still plenty of room for growth in its home market.

The Visa partnership with its more attractive pricing could accelerate subscriber growth, which would be good for Eros International.

However, investors may simply be rewarding Eros International stock due to earnings reports from other media companies. Both ViacomCBS and Fox Corporation traded higher this week after beating Wall Street's earnings expectations. When multiple companies in the same industry report encouraging results, it can sometimes change investors' perspective, lifting all related stocks.

Now what

While it's not uncommon to see related tickers rise, it's not relevant for long-term investors. After all, each company's results will be distinct. That said, reviewing results from competitors can be helpful in understanding business and consumer trends. 

The meatier news for Eros International investors is the Visa partnership. Financial terms of the agreement weren't given. But this could potentially lower customer acquisition costs for Eros Now and drive subscriber growth. Both factors would boost profitability, which is very relevant when you're buying and holding for the long haul.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Visa. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Eros International Plc Stock Quote
Eros International Plc
ESGC
Visa Inc. Stock Quote
Visa Inc.
V
$183.96 (-0.98%) $-1.83
Fox Corporation Stock Quote
Fox Corporation
FOXA
$31.71 (-1.25%) $0.40
Fox Corporation Stock Quote
Fox Corporation
FOX
$29.47 (-1.41%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.