Please ensure Javascript is enabled for purposes of website accessibility

Why Genius Brands Stock Is Rising 4% Today

By Rich Duprey – May 18, 2021 at 3:11PM

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

There's a good chance it could tumble again tomorrow.

What happened

Shares of Genius Brands (GNUS -3.56%) rose 3.3% in trading Tuesday after the company reported first-quarter results that showed revenue rocketed 218% from the year-ago period, a seemingly robust performance for the children's media company.

So what

Yet as is often the case with Genius Brands, not all is what it seems. In a post on the company's website, CEO Andy Heyward discussed the revenue gains, acquisitions, and viewership on its Kartoon! Channel. What he failed to say was that the entire increase in revenue was solely the result of Genius Brands' acquisition in February of the public relations, marketing, and media company ChizComm.

Magnifying glass over financial report

Image source: Getty Images.

Genius Brands' revenue from licensing and royalties, or what was previously its primary source of money, actually tumbled 16% year over year (TV and home entertainment revenue was up 60%, though).

Now what

No doubt the millions of views the Kartoon! Channel received from viewers downloading the app are helpful to its future endeavors, and ChizComm, as a public relations and marketing company, could be a source of future growth. But Genius Brands did not see its revenue triple organically this quarter.

As has become routine with Genius Brands, the breathless press releases it issues need to be parsed closely, and there's less than meets the eye with this media company's earnings report. It could lead the stock to give up all the gains it made as investors realize things aren't as good as they were made to seem.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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

Genius Brands International, Inc. Stock Quote
Genius Brands International, Inc.
GNUS
$0.61 (-3.56%) $0.02

*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
332%
 
S&P 500 Returns
104%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

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.