Madison Square Garden Entertainment Corp. (MSGE) AI Stock Analysis

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Madison Square Garden Entertainment Corp.

(NYSE:MSGE)

68Neutral

Madison Square Garden Entertainment Corp. has demonstrated significant revenue and profitability improvements, bolstered by positive sentiment from the latest earnings call and leadership changes. However, high leverage and weak equity positions pose financial risks. The technical analysis suggests a cautious outlook with bearish elements, while valuation indicates the stock is fairly priced. Overall, the company shows potential for growth, but investors should be mindful of the financial risks.

Positive Factors

Financial Performance

MSGE reported solid F2Q25 results as revenue grew 1.2% to $407mn and AOI increased 2.5% to $164mn.

Future Growth

The Garden's events are trending above a record, signaling a positive early indication for future growth.

Market Position

MSGE's solid market position should continue to help the company benefit from strong demand trends for live music/entertainment events.

Negative Factors

Concert Bookings

For the remainder of FY25, Garden concert bookings will be down in F3Q and F4Q, while bookings at theaters are pacing down in F3Q.

Guidance and Costs

MSGE lowered FY25 guidance, citing slower concert bookings and incremental expense associated with bringing sponsorship sales back in-house.

Industry Challenges

The company's outlook for concert bookings growth has been revised lower, reflecting industry softness but also more idiosyncratic headwinds from Billy Joel and select cancellations.

Madison Square Garden Entertainment Corp. (MSGE) vs. S&P 500 (SPY)

Market Cap

$1.56B

Dividend YieldN/A

Average Volume (3M)343.02K

Price to Earnings (P/E)12.4

Beta (1Y)1.14

Revenue Growth7.44%

EPS Growth71.46%

CountryUS

Employees1,200

SectorConsumer Cyclical

Sector Strength63

IndustryEntertainment

Share Statistics

EPS (TTM)2.62

Shares Outstanding40,974,854

10 Day Avg. Volume302,715

30 Day Avg. Volume343,022

Financial Highlights & Ratios

PEG Ratio0.17

Price to Book (P/B)N/A

Price to Sales (P/S)1.69

Price to Cash Flow (P/CF)3.60

P/FCF Ratio3.60

Enterprise Value/Market Cap1.77

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit8.21

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$42.40

Price Target Upside29.82% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

Madison Square Garden Entertainment Corp. Business Overview & Revenue Model

Company DescriptionMadison Square Garden Entertainment Corp. engages in the entertainment business. It produces, presents, or hosts various live entertainment events, including concerts, family shows, and special events, as well as sporting events, such as professional boxing, college basketball and hockey, professional bull riding, mixed martial arts, and esports and wrestling in its venues, including The Garden, Hulu Theater, Radio City Music Hall, and the Beacon Theatre in New York City; and The Chicago Theatre. The company also operates 70 entertainment dining and nightlife venues spanning 20 markets across five continents under the Tao, Marquee, Lavo, Beauty & Essex, Cathédrale, Hakkasan, and Omnia brand names; and creates and operates New England's premier music festival. In addition, it features the Radio City Rockettes, which serves as the star for its Christmas Spectacular at Radio City Music Hall. The company was founded in 2006 and is based in New York, New York.

How the Company Makes MoneyMSGE generates revenue through multiple streams, primarily from the operation of its renowned venues and the hosting of live events. Revenue is earned from ticket sales, venue rentals, and sponsorships, as well as food and beverage concessions during events. The company also benefits from licensing and merchandising opportunities related to its events and productions. Additionally, MSGE collaborates with various partners for broadcasting rights and special event promotions, further enhancing its earnings potential. These diverse revenue streams allow MSGE to maintain its position as a leading entertainment provider.

Madison Square Garden Entertainment Corp. Financial Statement Overview

Summary

Madison Square Garden Entertainment Corp. has shown a commendable turnaround in profitability and revenue growth, with improving margins and cash flow metrics. However, the high leverage and weak equity position pose potential financial risks that need to be managed carefully to sustain growth.

Income Statement

Positive

The company has shown significant improvement in revenue over the years, with a strong revenue growth rate from negative to positive figures, indicating recovery. The TTM gross profit margin is robust at 59.27%, and net profit margin has improved to 23.56% from previous losses, highlighting enhanced profitability. However, historical volatility in margins poses potential risk.

Balance Sheet

Neutral

The balance sheet shows a weak equity position, with a negative stockholders' equity in recent years, though it has improved slightly to $10.33 million in TTM. The debt-to-equity ratio remains high, indicating significant leverage. The equity ratio is low, suggesting potential solvency risks despite asset growth.

Cash Flow

Positive

Cash flow has improved with positive free cash flow growth in recent years. The operating cash flow to net income ratio is healthy, indicating good cash conversion. However, cash flow from financing activities shows consistent outflows, which may impact financial flexibility.

Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
959.26M	851.50M	653.49M	81.81M	584.60M
	Gross Profit
336.55M	351.57M	233.68M	-14.42M	204.07M
	EBIT
111.94M	105.01M	-64.99M	-237.29M	225.33M
	EBITDA
164.12M	202.91M	-1.91M	-103.19M	359.40M
	Net Income Common Stockholders
144.30M	76.60M	-202.83M	-219.31M	171.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
33.55M	76.09M	58.10M	317.82M	1.24B
	Total Assets
1.55B	1.40B	1.53B	1.70B	3.72B
	Total Debt
1.07B	902.92M	956.79M	735.92M	261.16M
	Net Debt
1.04B	826.83M	898.69M	418.10M	0.00
	Total Liabilities
1.58B	1.47B	1.53B	1.20B	844.77M
	Stockholders Equity
-23.16M	-69.47M	-1.48M	495.90M	2.84B
Cash Flow		Free Cash Flow
87.08M	120.51M	79.55M	-158.43M	1.88M
	Operating Cash Flow
111.27M	135.69M	95.35M	-148.12M	31.53M
	Investing Cash Flow
-62.37M	30.30M	45.44M	-10.34M	276.39M
	Financing Cash Flow
-99.69M	-144.22M	-396.29M	473.49M	-315.38M

Madison Square Garden Entertainment Corp. Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price32.66

Price Trends

50DMA

32.87

Negative

100DMA

34.25

Negative

200DMA

37.08

Negative

Market Momentum

MACD

-0.37

Negative

RSI

54.62

Neutral

STOCH

87.60

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSGE, the sentiment is Neutral. The current price of 32.66 is above the 20-day moving average (MA) of 31.25, below the 50-day MA of 32.87, and below the 200-day MA of 37.08, indicating a neutral trend. The MACD of -0.37 indicates Negative momentum. The RSI at 54.62 is Neutral, neither overbought nor oversold. The STOCH value of 87.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MSGE.

Madison Square Garden Entertainment Corp. Risk Analysis

Madison Square Garden Entertainment Corp. disclosed 40 risk factors in its most recent earnings report. Madison Square Garden Entertainment Corp. 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

Madison Square Garden Entertainment Corp. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMAX	70 Outperform	$1.15B	44.87	9.00%	―	-1.98%	-1.18%
MSGE	68 Neutral	$1.56B	12.45	1222.83%	―	7.44%	71.46%
IQ	64 Neutral	$1.85B	17.31	6.01%	―	-9.84%	-61.26%
Sector *	60 Neutral	$6.86B	11.61	3.16%	4.15%	2.41%	-21.45%
SPHR	52 Neutral	$1.03B	―	-14.99%	―	22.32%	-184.25%
LGF.A	41 Neutral	$1.86B	―	168.75%	―	-2.85%	75.96%
LGF.B	39 Underperform	$1.86B	―	259.47%	―	-2.85%	75.96%

* Consumer Cyclical Sector Average

Performance Comparison

MSGE

Madison Square Garden Entertainment Corp.

32.66

-7.44

-18.55%

IMAX

23.90

6.82

39.93%

LGF.A

Lions Gate Entertainment Class A

8.28

-2.17

-20.77%

LGF.B

Lions Gate Entertainment Class B

7.46

-2.30

-23.57%

Iqiyi

1.92

-3.15

-62.13%

SPHR

Sphere Entertainment

28.88

-11.18

-27.91%

Madison Square Garden Entertainment Corp. Earnings Call Summary

Earnings Call Date:Feb 06, 2025

(Q2-2025)

% Change Since: -8.95%|

Next Earnings Date:May 08, 2025

Earnings Call Sentiment Positive

The earnings call reflected a positive outlook driven by record revenue from the Christmas Spectacular and strong demand for in-person events despite facing tough comparisons in concert bookings and higher expenses. The company is optimistic about future growth in bookings and continues to return capital to shareholders.

Q2-2025 Updates

Positive Updates

Record Revenue from Christmas Spectacular

The Christmas Spectacular achieved over $170 million in total revenue, a new record for the production, driven by robust ticket demand and the show's strongest sell-through rate in 25 years.

Strong In-Person Event Demand

Hosted nearly 2.7 million guests at more than 440 live events, with strong per cap spending on food, beverage, and merchandise at record levels.

Positive Momentum for Knicks and Rangers

Positive momentum in economic arrangements with Knicks and Rangers, with three additional home games played in the quarter compared to the prior year.

AOI Growth and Share Repurchase

Adjusted Operating Income (AOI) increased by 2%, and the company repurchased $25 million of Class A common stock, with $85 million remaining under the buyback authorization.

Encouraging Bookings Outlook for Fiscal 2026

Pacing up for the first quarter of fiscal 2026 in concert bookings at the Garden, driven by a diverse set of acts.

New Sponsorship Deals

Announced new multiyear sponsorship deals with Lenovo, Motorola, and others, enhancing marketing partnerships.

Negative Updates

Decrease in Concert Events

Year-over-year decrease in the number of concerts, primarily due to the absence of three Billy Joel performances and a shift from promoted events to rentals.

Higher SG&A Expenses

Increase in selling, general, and administrative expenses, including $3.1 million in executive transition costs.

Concert Revenue Decline

Lower concert revenues due to a mixed shift at the Garden and fewer concerts compared to the previous year.

Challenges with Comparisons to Prior Year

Facing tough year-over-year comparisons at The Garden due to the previous year's record number of concerts.

Company Guidance

During the fiscal 2025 second quarter earnings call for Madison Square Garden Entertainment Corp., the company reported strong financial and operational performance. Revenues reached $407 million, with an adjusted operating income of $164 million, driven largely by the success of the Christmas Spectacular, which generated over $170 million in revenue. The production saw a record sell-through rate in 25 years, with 1.1 million tickets sold across 200 performances, marking a significant increase from the previous year. The company also hosted 440 live events across its venues, welcoming nearly 2.7 million guests, and continued to experience robust demand for concerts and sporting events, despite fewer concerts compared to the previous year. Additionally, MSG Entertainment resumed its stock buyback program, repurchasing $25 million of Class A common stock. The company remains on track to achieve mid to high single-digit AOI growth for the fiscal year, bolstered by strong consumer demand and strategic pricing initiatives.

Madison Square Garden Entertainment Corp. Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Madison Square Garden Entertainment Appoints New CFO and Director

Positive

Apr 9, 2025

On April 7, 2025, Madison Square Garden Entertainment Corp. announced the appointment of David Collins as Executive Vice President and Chief Financial Officer, effective April 14, 2025. Collins, who previously held a similar role at Harris Blitzer Sports and Entertainment LLC, brings extensive experience in finance and operations management. Additionally, on the same date, Claire Sweeney was appointed as a director of the company, filling a vacancy on the board. These strategic appointments are expected to strengthen the company’s leadership and enhance its operational capabilities.

Spark’s Take on MSGE Stock

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

The overall stock score for Madison Square Garden Entertainment Corp. is influenced primarily by strong financial performance and positive earnings call sentiment. While the company has shown impressive revenue and profitability growth, high leverage and a weak equity position present risks. Technical indicators suggest neutral momentum, and valuation metrics indicate the stock is fairly valued. The positive outlook from the recent earnings call adds to the score, reflecting optimism in operational and financial growth.

To see Spark’s full report on MSGE 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.