Why MoviePass Could Hit 1 Million Users This Year And What It Means For Helios & Matheson

MoviePass announced Thursday a new one-year promotions subscription service. According to one Wall Street analyst, Helios and Matheson Analytics Inc HMNY will ride the MoviePass wave to a higher share price in the coming year.

The Analyst

Maxim Group analyst Brian Kinstlinger has a Buy rating and a $25 price target for Helios stock.

The Thesis

In a note on Thursday, Kinstlinger said Helios is making the right move by pushing hard to build subscriber numbers. Its new promotion gives users a one-year MoviePass subscription for just $89.95, or $6.95 per month. MoviePass already lowered its monthly rate from $29.99 to $9.99 back in August.

Kinstlinger estimates that MoviePass currently has between 750,000 and 800,000 subscribers and that each additional 100,000 subscribers will bring in $9 million in cash for the company.

“By speeding up subscriber acquisition, we believe MoviePass' influence and positioning in the industry is strengthening,” Kinstlinger said. “In our view it is only a matter of time before studios and theaters alike begin negotiating partnerships.”

Kinstlinger estimates the new promotion will push MoviePass over the 1 million subscriber mark by the end of 2017 given the strong theatrical lineup headed into December. Once the service hits 2 million subscribers, Kinstlinger said theaters and studios will not be able to ignore it.

Maxim expects the Helios acquisition of MoviePass will close in December, meaning that the services will be partially reflected in Helios’ December quarter and fully reflected in the March quarter.

Price Action

Helios stock jumped 1.8 percent on Thursday and opened Friday’s session higher by more than 6 percent on optimism about the new promotion.

Related Links:

How Does Helios And Matheson Make Money From MoviePass?

MoviePass Streaming Speculation Gives Helios & Matheson Yet Another Boost