By Mackenzie Tatananni

Livestreaming platform Rumble is poised to establish itself as a leading "unbiased media platform," a Maxim Group analyst said on Wednesday as he initiated coverage of the company's shares with a Buy rating.

Maxim analyst Tom Forte set a $20 price target on Rumble stock, which was up 8% to $11.03 in Wednesday trading.

In Forte's view, Rumble -- which brands itself as a champion of "free speech" -- is a strong contender in the video space, having shown "solid user growth." The analyst said Rumble's cloud-computing capabilities could also pose an "enterprise alternative to big tech."

Donald Trump's Truth Social migrated to Rumble Cloud in April 2022. Rumble called Truth Social "the first significant customer" to onboard with the company's cloud services business. Rumble began offering the service to other clients in the first quarter of 2024.

"We believe the market is underestimating Rumble's potential to monetize its audience and, over time, build a sustainable cloud computing business," Forte wrote.

Founded in 2013, Rumble won the backing of conservative venture capitalists and, in 2021, received an investment from Narya Capital, a firm co-founded by incoming Vice President J.D. Vance.

Rumble went public in 2022 with an initial enterprise value of $2.1 billion. Shares of the company soared more than 100% in December after Tether, the issuer of digital currency of the same name, announced a $775 million investment in the company.

As a result of the investment, Rumble is due to add $250 million to its cash balance in the first quarter of 2025, Forte noted.

The analyst expects Rumble to achieve positive free cash flow by 2026. "Based on our outlook, we believe there is sufficient capital to fund operations and growth going forward," Forte wrote.

The analyst said Rumble's "genuine commitment to providing a transparent, unbiased space" is largely responsible for the platform's growth.

"We believe this reflects the rising demand for a video platform that avoids enforcing political, ideological, or editorial biases, instead fostering a space where diverse perspectives can coexist freely," Forte wrote.

Rumble reported an average of 67 million monthly active users in the third quarter of 2024, up from 53 million in the previous quarter.

However, the platform has attracted its fair share of backlash.

In 2023, Rumble was criticized for hosting videos that promoted false claims about voter fraud in the 2020 election and deaths that were purportedly linked to Covid-19 vaccines.

Rumble sued the California attorney general and secretary of state in November over a law requiring websites to remove or label "materially deceptive content" related to elections.

Forte noted that the company is awaiting the result of two antitrust lawsuits filed against Google in January 2021 and May 2025.

The first accuses Alphabet-owned Google of bias in search results and alleges that its algorithm favors YouTube over Rumble, hindering Rumble's growth and market presence. The case is set for trial in May 2025.

Another lawsuit filed in May 2024 accused the tech giant of anticompetitive digital advertising practices, with Rumble seeking over $1 billion in damages.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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January 15, 2025 12:41 ET (17:41 GMT)

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