Lionsgate Studios (LION) AI Stock Analysis

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Lionsgate Studios

(NASDAQ:LION)

41Neutral

Lionsgate Studios faces significant financial and operational challenges. The financial performance is weak, with profitability and liquidity concerns. Technical indicators are bearish, and the stock is undervalued due to ongoing losses. Stability and strategic improvements are needed to enhance financial health.

Lionsgate Studios (LION) vs. S&P 500 (SPY)

Market Cap

$1.89B

Dividend YieldN/A

Average Volume (3M)275.35K

Price to Earnings (P/E)―

Beta (1Y)0.63

Revenue GrowthN/A

EPS Growth-285.78%

CountryUS

Employees1,717

SectorFinancial

Sector Strength78

IndustryEntertainment

Share Statistics

EPS (TTM)-0.64

Shares Outstanding288,681,200

10 Day Avg. Volume355,976

30 Day Avg. Volume275,352

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.08

Price to Cash Flow (P/CF)-3.50

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.50

Price Target Upside30.17% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Lionsgate Studios Business Overview & Revenue Model

Company DescriptionLionsgate Studios (LION) is a leading global entertainment company known for its film, television, and digital content production and distribution. The company operates in various sectors, including motion picture production, television programming, and home entertainment. Lionsgate is recognized for a diverse portfolio that includes blockbuster films, critically acclaimed television series, and innovative digital content across multiple platforms.

How the Company Makes MoneyLionsgate Studios generates revenue through several key streams. Primarily, the company earns from the production and distribution of films and television content. This includes box office sales from theatrical releases, licensing fees from television networks and streaming platforms, and home entertainment sales, such as DVDs, Blu-rays, and digital downloads. Additionally, Lionsgate benefits from syndication and distribution deals that expand its content reach globally. The company also engages in strategic partnerships and co-productions to optimize its production costs and enhance market reach, contributing significantly to its revenue. Moreover, Lionsgate explores merchandise sales and ancillary product lines related to its popular franchises as supplementary income sources.

Lionsgate Studios Financial Statement Overview

Summary

Lionsgate Studios faces significant challenges, with profitability and cash flow issues highlighted in the TTM. The high leverage and negative equity raise concerns about financial sustainability, requiring strategic improvements to stabilize and improve financial health.

Income Statement

Neutral

Lionsgate Studios has experienced fluctuating revenue with a slight decrease in TTM. The company shows a negative net profit margin and EBITDA margin, indicating profitability challenges. The gross profit margin has decreased significantly in the TTM, reflecting increasing cost pressures.

Balance Sheet

Negative

The company's high debt-to-equity ratio is concerning, with negative stockholders' equity indicating potential solvency issues. Despite this, the asset base has expanded over the years, which may provide some stability. However, the negative equity ratio highlights financial instability.

Cash Flow

Negative

Cash flow metrics are weak, with negative free cash flow in the TTM, indicating liquidity concerns. Operating cash flow has turned negative in the TTM, reflecting operational inefficiencies. The cash flow to net income ratios indicate challenges in converting income to cash.

TTM	Mar 2024	Mar 2023	Mar 2021	Dec 2018	Dec 2017
Breakdown
Income Statement		Total Revenue
3.01B	2.99B	3.08B	1.91B	17.87M	135.25M
	Gross Profit
886.90M	1.10B	875.90M	692.90M	17.87M	135.25M
	EBIT
136.30M	139.70M	139.60M	95.90M	89.48M	77.78M
	EBITDA
1.20B	16.70M	1.87B	922.30M	96.59M	87.49M
	Net Income Common Stockholders
-197.50M	-93.50M	-300.00K	-19.60M	43.82M	39.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
109.54M	312.60M	210.90M	361.30M	262.30M	30.81M
	Total Assets
1.88B	5.10B	4.41B	3.69B	4.73B	4.58B
	Total Debt
109.00M	4.10B	3.18B	2.32B	260.47M	271.17M
	Net Debt
-542.00K	3.82B	2.97B	1.96B	249.77M	262.05M
	Total Liabilities
1.75B	6.13B	4.85B	3.71B	4.29B	4.18B
	Stockholders Equity
130.77M	-1.15B	-780.40M	-236.90M	446.24M	401.63M
Cash Flow		Free Cash Flow
-285.00M	479.00M	339.60M	-242.60M	156.79M	149.90M
	Operating Cash Flow
-275.50M	488.90M	346.10M	-232.40M	166.43M	155.20M
	Investing Cash Flow
-38.60M	-331.80M	31.30M	-300.00K	-236.15M	-257.32M
	Financing Cash Flow
259.90M	-74.90M	-394.50M	365.00M	95.71M	138.71M

Lionsgate Studios Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.53

Price Trends

50DMA

7.75

Negative

100DMA

7.47

Negative

200DMA

7.33

Negative

Market Momentum

MACD

-0.40

Positive

RSI

40.69

Neutral

STOCH

37.45

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LION, the sentiment is Negative. The current price of 6.53 is below the 20-day moving average (MA) of 6.97, below the 50-day MA of 7.75, and below the 200-day MA of 7.33, indicating a bearish trend. The MACD of -0.40 indicates Positive momentum. The RSI at 40.69 is Neutral, neither overbought nor oversold. The STOCH value of 37.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LION.

Lionsgate Studios Risk Analysis

Lionsgate Studios disclosed 80 risk factors in its most recent earnings report. Lionsgate Studios reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Lionsgate Studios Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DIS	73 Outperform	$153.46B	27.56	5.54%	1.12%	3.97%	89.53%
Sector *	63 Neutral	$12.00B	9.27	8.14%	79.61%	12.85%	-5.12%
PARA	51 Neutral	$7.79B	―	-31.94%	1.83%	-1.48%	-450.15%
PARAA	47 Neutral	$7.69B	―	-31.94%	0.90%	-1.48%	-450.15%
LION	41 Neutral	$1.89B	―	19.96%	―	―	-285.78%
LGF.A	41 Neutral	$1.80B	―	168.75%	―	-2.85%	75.96%
LGF.B	39 Underperform	$1.80B	―	259.47%	―	-2.85%	75.96%

* Financial Sector Average

Performance Comparison

LION

Lionsgate Studios

6.63

-4.14

-38.44%

PARA

Paramount Global Class B

10.76

-1.39

-11.44%

DIS

Walt Disney

84.00

-26.98

-24.31%

LGF.A

Lions Gate Entertainment Class A

7.96

-2.25

-22.04%

LGF.B

Lions Gate Entertainment Class B

7.18

-2.29

-24.18%

PARAA

Paramount Global

22.36

-0.02

-0.09%

Lionsgate Studios Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: -11.52% | Next Earnings Date: Nov 6, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. While there are positive developments such as strong library revenue, expected Starz OTT growth, strategic tentpole releases, and new AI initiatives, these are balanced by significant challenges including disappointing theatrical releases, an adjusted OIBDA loss, restructuring efforts, and a market correction in TV production.

Highlights

Strong Library Revenue

The company's library generated nearly $900 million in trailing 12-month revenue, highlighting the strength and reliability of this segment.

Starz OTT Subscriber Growth Expected

Starz is expected to return to OTT subscriber growth in the back half of the year, with a $200 million segment profit forecast for the fiscal year.

Strategic Tentpole Releases

The company is focusing on major releases such as the sixth Hunger Games movie, Ballerina, and Now You See Me III to drive future growth.

New Partnerships and AI Initiatives

Lionsgate announced a new partnership with AI research company Runway to create and train a model for use in filmmaking, indicating a strategic move towards technological integration.

Lowlights

Disappointing Theatrical Releases

The company faced underperformance in theatrical releases, particularly with the movie Borderlands, which significantly impacted financial results.

Adjusted OIBDA Loss

Lionsgate reported an adjusted OIBDA loss of $18 million for the quarter.

Restructuring and Workforce Reduction

The company offered voluntary severance and early retirement packages to U.S. employees, with approximately 8% of eligible employees taking the offers.

Market Correction in TV Production

Both scripted and unscripted TV landscapes are affected by a market correction, with buyers ordering fewer shows.

Company Guidance

During the Lionsgate Second Quarter 2025 Earnings Call, the company provided guidance reflecting both challenges and strategic plans for the future. CEO Jon Feltheimer reported a $949 million revenue and a $18 million adjusted OIBDA loss for the quarter, impacted by industry disruptions and underperformance in their film releases, particularly the movie "Borderlands." Despite these setbacks, the company remains optimistic, noting their diversified portfolio and strong library, which generated nearly $900 million in trailing 12-month revenue. Looking ahead, Lionsgate anticipates adjusted OIBDA for the fiscal year between $300 million and $320 million. Starz, a significant part of Lionsgate's operations, is on track for a $200 million segment profit, bolstered by a successful price increase and strong viewership figures, with "Power Book II Ghost" reaching 11.7 million multi-platform viewers. The company is also actively engaging in strategic developments, including a planned full separation of the Studio and Starz by the end of the calendar year, subject to regulatory approvals, and a new partnership with AI company Runway to explore innovative content creation approaches.

Lionsgate Studios Corporate Events

Executive/Board Changes

Lionsgate Studios Extends EVP Bruce Tobey’s Contract

Neutral

Apr 10, 2025

On April 9, 2025, Lions Gate Entertainment Corp. announced an amendment to the employment agreement with Bruce Tobey, extending his term as Executive Vice President and General Counsel through March 31, 2028. The amendment includes a revised compensation package, with an annual base salary of $1,200,000 and a target bonus of 85% of his salary, alongside eligibility for annual equity awards. The agreement outlines conditions for severance payments and accelerated vesting of equity awards in the event of termination without cause or a change in control, impacting the company’s executive compensation strategy and potentially its financial commitments.

Spark’s Take on LION Stock

According to Spark, TipRanks’ AI Analyst, LION is a Underperform.

Lionsgate Studios is currently experiencing significant financial difficulty, with negative profitability indicators, high leverage, and liquidity concerns. The technical analysis signals bearish momentum, and the negative P/E ratio indicates valuation challenges. The absence of earnings call insights or corporate events further limits the prospects for immediate recovery.

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

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.