Lions Gate Entertainment Class A (LGF.A) AI Stock Analysis

• Market Cap: $1.73B
• Dividend Yield: N/A
• Average Volume (3M): 674.17K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.83
• Revenue Growth: -2.85%
• EPS Growth: 75.96%
• Country: US
• Employees: 1,717
• Sector: Communication Services
• Sector Strength: 79
• Industry: Entertainment
• EPS (TTM): -1.19
• Shares Outstanding: 83,691,060
• 10 Day Avg. Volume: 804,804
• 30 Day Avg. Volume: 674,175
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.57
• Price to Cash Flow (P/CF): -3.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $10.50
• Price Target Upside: 36.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Lions Gate's stock score is heavily impacted by its financial difficulties, including negative profit margins and high leverage. Despite securing key executive leadership, the company's weak financial position and unattractive valuation metrics suggest significant risk, overshadowing any technical or corporate developments.

Positive Factors

Financial Performance

Lionsgate reported third quarter revenues of $970.5 million, coming in well above the estimate of $882 million.

Partnerships

The company's agreement with Amazon making the films available on Prime after being available on Starz highlights the value that can be placed on its productions.

Ratings and Targets

The reaffirmed OUTPERFORM investment rating and maintained price target of $12 provide sufficient upside to justify investments in the stock at current levels.

Negative Factors

Legal Challenges

Litigation has the potential to delay the planned separation.

Operational Performance

Poor film performance drives estimate revision: Studio OIBDA was $(6.3) million, down from nearly $100 million in the year-ago period.

Lions Gate Entertainment Class A Business Overview & Revenue Model

Company Description

Lions Gate Entertainment Corp., commonly known as Lionsgate, is a leading global entertainment company. It operates in the motion picture and television production industries, engaging in the creation, production, and distribution of feature films, television programming, and digital content. Known for its diverse and dynamic portfolio, Lionsgate produces and distributes content across various platforms, including theaters, broadcast, cable, and streaming services. Its core sectors include film production and distribution, television programming, and digital media, catering to a wide range of audiences worldwide.

How the Company Makes Money

Lionsgate makes money primarily through the production and distribution of films and television content. Key revenue streams include theatrical releases, home entertainment sales (such as DVDs and Blu-rays), and digital distribution through streaming platforms. Additionally, the company earns income from television licensing, where it licenses its content to various networks and streaming services. Lionsgate also benefits from partnerships and co-productions with other entertainment companies, increasing its market reach and revenue potential. Merchandise and licensing deals associated with its popular franchises contribute to its earnings as well. Ancillary revenues come from the monetization of its vast library of content, which continues to generate income long after the initial release. These diversified revenue streams enable Lionsgate to capitalize on both traditional and emerging media consumption trends.

Lions Gate Entertainment Class A Financial Statement Overview

Summary

Lions Gate is facing several financial challenges with negative margins and a weak balance sheet. While there is some revenue growth, profitability remains elusive, and high leverage poses significant risks. Cash flow issues further complicate the financial stability, suggesting a need for strategic adjustments to improve financial health.

Income Statement

Lions Gate's income statement shows significant challenges with profitability. The TTM data reveals a negative gross profit margin, reflecting an inability to control costs effectively relative to revenue. The net profit margin is also negative, indicating losses. While there is some revenue growth from previous periods, the consistent negative EBIT and EBITDA margins suggest operational inefficiencies.

Balance Sheet

The balance sheet indicates a weak equity position, with negative stockholders' equity in the latest TTM. The debt-to-equity ratio is concerning due to the negative equity, indicating high leverage. The equity ratio is negative, highlighting financial instability and potential solvency issues. These factors suggest significant financial risk.

Cash Flow

The cash flow statement reflects a mixed picture. While there was a positive operating cash flow in 2024, the TTM data shows negative free cash flow, raising concerns about liquidity and the company's ability to generate sufficient cash to cover its obligations. The operating cash flow to net income and free cash flow to net income ratios are not favorable, indicating inefficient cash conversion.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
3.87B	4.02B	3.85B	3.60B	3.27B	3.89B
	Gross Profit
1.64B	1.83B	1.54B	1.54B	1.55B	1.66B
	EBIT
180.40M	-938.80M	9.20M	42.70M	170.60M	7.60M
	EBITDA
1.78B	912.00M	141.20M	1.84B	1.49B	1.96B
	Net Income Common Stockholders
-284.00M	-1.10B	-2.02B	-205.40M	-34.50M	-206.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
98.42M	314.00M	272.10M	371.20M	528.70M	318.20M
	Total Assets
1.70B	7.09B	7.43B	8.99B	8.31B	7.95B
	Total Debt
814.91M	4.42B	2.02B	4.11B	3.33B	3.18B
	Net Debt
723.49M	4.10B	1.75B	3.73B	2.81B	2.87B
	Total Liabilities
1.62B	7.28B	6.30B	5.99B	5.51B	5.29B
	Stockholders Equity
53.92M	-312.70M	784.50M	2.68B	2.79B	2.66B
Cash Flow		Free Cash Flow
-397.90M	362.10M	-163.30M	-694.00M	-35.50M	583.50M
	Operating Cash Flow
-364.30M	396.80M	-114.30M	-660.90M	-500.00K	614.60M
	Investing Cash Flow
-57.60M	-376.80M	-18.30M	-80.50M	-31.10M	-51.70M
	Financing Cash Flow
349.40M	39.60M	63.80M	599.40M	237.90M	-426.10M

Lions Gate Entertainment Class A Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LGF.A, the sentiment is Negative. The current price of 7.68 is below the 20-day moving average (MA) of 8.61, below the 50-day MA of 9.14, and below the 200-day MA of 8.40, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 39.01 is Neutral, neither overbought nor oversold. The STOCH value of 16.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LGF.A.

Lions Gate Entertainment Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCS	63 Neutral	$495.65M	―	-1.66%	1.75%	0.82%	-152.64%
PARA	61 Neutral	$7.65B	―	-31.94%	1.87%	-1.48%	-450.15%
IQ	59 Neutral	$1.58B	14.79	6.01%	―	-9.84%	-61.26%
Sector *	58 Neutral	$26.25B	2.79	-10.85%	4.33%	2.15%	-44.22%
LION	40 Underperform	$1.82B	―	19.96%	―	―	-285.78%
LGF.A	38 Underperform	$1.73B	―	168.75%	―	-2.85%	75.96%
LGF.B	37 Underperform	$1.73B	―	259.47%	―	-2.85%	75.96%

Lions Gate Entertainment Class A Corporate Events

Lions Gate Extends EVP Bruce Tobey’s Contract

On April 9, 2025, Lions Gate Entertainment Corp. extended the employment agreement of Bruce Tobey, its Executive Vice President and General Counsel, by two years until March 31, 2028. The amendment includes an annual base salary of $1,200,000 and a target annual bonus of 85% of his base salary, with provisions for equity awards and severance benefits under specific conditions, highlighting the company’s commitment to retaining key executives.

Spark’s Take on LGF.A Stock

According to Spark, TipRanks’ AI Analyst, LGF.A is a Neutral.

Lions Gate’s overall stock score reflects significant financial challenges, including negative profit margins and high leverage. Despite some positive technical indicators, the company’s weak financial position and unattractive valuation metrics suggest considerable risk, warranting caution for potential investors.

To see Spark’s full report on LGF.A stock, click here.