Lionsgate Studios (LION) AI Stock Analysis

• Market Cap: $2.27B
• Dividend Yield: N/A
• Average Volume (3M): 2.15M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.79
• Revenue Growth: 97.19%
• EPS Growth: -21.46%
• Country: US
• Employees: 1,717
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Entertainment
• EPS (TTM): -0.20
• Shares Outstanding: 289,729,300
• 10 Day Avg. Volume: 2,614,823
• 30 Day Avg. Volume: 2,150,957
• PEG Ratio: 1.94
• Price to Book (P/B): -2.03
• Price to Sales (P/S): 0.67
• P/FCF Ratio: -17.67
• Enterprise Value/Market Cap: 2.52
• Enterprise Value/Revenue: 2.06
• Enterprise Value/Gross Profit: 6.25
• Enterprise Value/Ebitda: 4.07
• 1Y Price Target: $8.90
• Price Target Upside: 7.88% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): -0.18
• Revenue Forecast (FY): $2.54B

• Rating: 52 Neutral
• Price Target: $7.50 ▼(-9.09% Downside)

Lionsgate Studios' overall stock score is primarily impacted by its financial challenges, including negative equity and cash flow issues. While technical indicators show positive momentum, and strategic financial maneuvers are promising, the company's valuation and high debt levels remain concerns. The positive outlook from the earnings call and corporate events provide some optimism, but significant financial restructuring is needed for substantial improvement.

Positive Factors

Record-Breaking Library Revenue

Achieving $1 billion in library revenue underscores the strength of Lionsgate's intellectual property portfolio, providing a stable revenue stream and enhancing long-term financial stability.

Strong Motion Picture Slate

A strong slate of films, including major franchises, positions Lionsgate to capture significant market share and drive future revenue growth, reinforcing its competitive position in the industry.

AI for Efficiency

Leveraging AI for operational efficiency and cost savings can enhance Lionsgate's competitive edge, allowing for better resource allocation and innovation in content creation.

Negative Factors

Operating Losses

Continued operating losses indicate underlying profitability challenges, which can strain financial resources and hinder long-term growth and investment capabilities.

High Leverage and Debt

High leverage and significant debt levels limit financial flexibility, increasing risk and potentially impacting Lionsgate's ability to invest in growth opportunities.

Declining Revenue

Declining revenue growth reflects challenges in maintaining market share and competitiveness, which could affect Lionsgate's ability to sustain long-term profitability and market position.

Lionsgate Studios Business Overview & Revenue Model

Company Description

Lionsgate Studios (LION) is a global entertainment company primarily engaged in the production and distribution of film and television content. Operating across multiple sectors, including feature films, television programming, and digital media, Lionsgate is known for its diverse portfolio of franchises and original content. The company produces a wide range of genres, catering to various audience segments, and has established itself as a significant player in the entertainment industry with a focus on both theatrical releases and streaming services.

How the Company Makes Money

Lionsgate generates revenue through several key streams, including theatrical distribution of films, television licensing, and digital streaming. The company earns money by producing and distributing films that perform well at the box office, as well as through licensing content to television networks and streaming platforms. Additionally, Lionsgate benefits from home entertainment sales, including DVD and Blu-ray sales, as well as digital downloads and rentals. The company has established significant partnerships with various streaming services, which provide a steady revenue influx through licensing agreements. Furthermore, Lionsgate's extensive catalog of intellectual properties allows it to monetize its content through merchandising and ancillary products, contributing to its overall earnings.

Lionsgate Studios Financial Statement Overview

Summary

Lionsgate Studios faces significant financial challenges, with declining revenues and profitability issues. The balance sheet shows negative equity, raising concerns about financial stability. While there is some positive cash flow growth, overall cash flow remains negative. The company needs to address these issues to improve its financial health.

Income Statement

Lionsgate Studios has experienced a decline in revenue, with a negative revenue growth rate of -11.13% in the TTM period. The gross profit margin has decreased to 26.73%, and the net profit margin is negative at -6.97%, indicating challenges in profitability. The EBIT margin is slightly positive at 3.12%, but the EBITDA margin remains strong at 43.95%, suggesting some operational efficiency despite the losses.

Balance Sheet

The company has a negative stockholders' equity, resulting in a negative debt-to-equity ratio, which is concerning. The return on equity is positive at 17.12%, but this is due to the negative equity. The equity ratio is not calculable due to negative equity, indicating financial instability.

Cash Flow

Lionsgate Studios shows a positive free cash flow growth rate of 18.60%, but both operating and free cash flows are negative. The operating cash flow to net income ratio is negative, indicating cash flow challenges. However, the free cash flow to net income ratio is above 1, suggesting some ability to cover net losses with free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.78B	3.20B	2.99B	3.08B	2.72B	1.91B
Gross Profit	919.00M	985.50M	1.10B	875.90M	794.20M	692.90M
EBITDA	1.41B	1.77B	334.80M	1.84B	1.68B	922.30M
Net Income	-194.10M	-128.50M	-93.50M	-300.00K	11.10M	-19.60M
Balance Sheet
Total Assets	5.16B	5.12B	5.10B	4.41B	4.33B	3.69B
Cash, Cash Equivalents and Short-Term Investments	202.40M	205.70M	277.00M	210.90M	256.90M	361.30M
Total Debt	3.89B	3.66B	3.72B	3.18B	2.76B	2.35B
Total Liabilities	6.28B	6.04B	6.13B	4.85B	4.26B	3.71B
Stockholders Equity	-1.26B	-1.05B	-1.15B	-780.40M	-261.30M	-236.90M
Cash Flow
Free Cash Flow	-53.70M	-120.30M	479.00M	339.60M	-441.10M	-242.60M
Operating Cash Flow	-42.10M	-106.80M	488.90M	346.10M	-435.00M	-232.40M
Investing Cash Flow	-7.40M	-35.40M	-331.80M	31.30M	-180.70M	-300.00K
Financing Cash Flow	52.40M	84.50M	-74.90M	-394.50M	525.50M	365.00M

Lionsgate Studios Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LION, the sentiment is Positive. The current price of 8.25 is above the 20-day moving average (MA) of 7.27, above the 50-day MA of 6.74, and above the 200-day MA of 6.77, indicating a bullish trend. The MACD of 0.33 indicates Negative momentum. The RSI at 73.22 is Negative, neither overbought nor oversold. The STOCH value of 92.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LION.

Lionsgate Studios Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOXA	77 Outperform	$29.89B	16.15	17.33%	0.77%	14.91%	9.30%
DIS	75 Outperform	$194.29B	15.89	11.78%	0.90%	3.61%	152.34%
NFLX	73 Outperform	$429.94B	39.77	42.86%	―	15.49%	35.54%
WBD	68 Neutral	$73.19B	157.20	1.36%	―	-4.29%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PSKY	53 Neutral	$16.25B	―	-1.90%	1.42%	-0.48%	97.09%
LION	52 Neutral	$2.27B	―	―	―	97.19%	-21.46%

Lionsgate Studios Corporate Events

Lionsgate Studios Expands Credit Facility to $1.25 Billion

On September 30, 2024, Lionsgate Studios Corp. subsidiaries entered into a senior secured amortizing term credit facility, initially valued at $455 million, secured by intellectual property rights from library titles. Over the following year, the facility’s maximum principal amount was increased multiple times, reaching $1.25 billion by September 26, 2025, through a series of amendments and waivers, reflecting Lionsgate’s strategic financial maneuvers to leverage its intellectual property assets.