In This Article:
We came across a bullish thesis on Boston Omaha Corporation (BOC) on Substack by Steve Wagner. In this article, we will summarize the bulls’ thesis on BOC. Boston Omaha Corporation (BOC)'s share was trading at $15.23 as of Nov 27th.
A busy urban street, its billboards showing advertisements for a variety of national and local brands.
Boston Omaha (BOC) reported its Q3 2024 earnings, showing steady growth across its business segments. Total revenues for the quarter reached $27.7 million, up from $24.5 million in Q3 2023. For the nine months ending September 30, 2024, the company generated $80.3 million in revenue, a 12% increase from $71.6 million during the same period last year. Revenue drivers included billboard rentals, which contributed $11.5 million in Q3, and broadband services, which generated $9.7 million. Additionally, premiums earned climbed to $5.4 million, reflecting a strong performance in the insurance segment, while investment income remained stable.
Despite the revenue growth, BOC reported a net loss from operations of $0.7 million for the quarter, a significant improvement over the $1.9 million loss in Q3 2023. The company’s net loss attributable to common stockholders remained steady at $1.6 million, with a basic and diluted net loss per share of $0.05. A key factor contributing to the loss was BOC's investment in Sky Harbour, a company in which it holds a significant stake. BOC reported a non-cash loss of $9.4 million from its share of Sky Harbour’s operational losses. However, the increase in Sky Harbour’s stock value during the quarter resulted in a $7.8 million unrealized gain on warrants, partially offsetting the operational losses.
On the balance sheet, BOC’s total assets decreased to $711.9 million, down from $768.2 million at the end of 2023. Liabilities increased slightly to $158.5 million, while equity attributable to stockholders fell to $527.7 million from $538.2 million. The company’s book value per share also decreased to $16.82 from $17.19 at the end of 2023. These adjustments reflect the ongoing complexities in BOC’s operations, including depreciation in its billboard and broadband businesses and the accounting treatment of its investment in Sky Harbour. Nevertheless, the market value of BOC’s stake in Sky Harbour is significantly higher than the GAAP value, which could enhance the company’s overall equity.
Despite the net loss, BOC’s core businesses continue to show resilience. The company reported $12.1 million in cash inflows from operations for the first nine months of 2024, slightly down from the prior year. BOC also repurchased shares, buying back 97,262 shares of its Class A common stock for a total of $1.38 million during Q3 2024. As of September 30, 2024, BOC had 30.8 million shares of Class A common stock outstanding and 527,780 Class B shares.