Sphere Entertainment (SPHR) AI Stock Analysis

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Sphere Entertainment

(NYSE:SPHR)

Rating:56Neutral

Price Target:

$38.00

▲(2.70%Upside)

Sphere Entertainment's stock score is primarily influenced by financial performance challenges, particularly in profitability and cash flow management. Technical analysis provides a modestly positive outlook with short-term bullish signals, offset by long-term resistance concerns. Valuation metrics are unfavorable, with a negative P/E ratio and no dividend yield, further impacting the overall score.

Positive Factors

Debt Reduction

Sphere announced an agreement with the MSG Networks term loan lending group to reduce the outstanding loan from over $800mm to $210mm.

Market Opportunity

The market is currently under-appreciating the opportunity for the Las Vegas Sphere to continue to reinvent itself with new content and improve execution to grow Revenue and AOI.

Revenue Growth

Raising Sphere experiences and residency revenues with a more optimistic assumption around the upcoming Wizard of Oz and higher residency count.

Negative Factors

Content Production Challenges

The Sphere Experience content is prohibitively expensive to produce, with only one or two shows developed per year, limiting monetization.

Financial Risk

Every core component of the Sphere platform relies on the Las Vegas ecosystem, and attempting to expand beyond it only magnifies the flaws and increases financial risk.

Valuation Concerns

The NPV of cash flows for MSG Networks is lower than the net debt, leading to a valuation of $0 in base and bull cases.

Sphere Entertainment (SPHR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.37B

Dividend YieldN/A

Average Volume (3M)891.62K

Price to Earnings (P/E)―

Beta (1Y)1.71

Revenue Growth-5.04%

EPS Growth-155.66%

CountryUS

Employees1,080

SectorCommunication Services

Sector Strength83

IndustryEntertainment

Share Statistics

EPS (TTM)-2.27

Shares Outstanding29,132,664

10 Day Avg. Volume568,053

30 Day Avg. Volume891,620

Financial Highlights & Ratios

PEG Ratio-0.05

Price to Book (P/B)0.54

Price to Sales (P/S)0.00

P/FCF Ratio33.84

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$45.56

Price Target Upside23.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Sphere Entertainment Business Overview & Revenue Model

Company DescriptionSphere Entertainment Co. (SPHR) is an innovative entertainment company specializing in immersive experiences and live events. The company is at the forefront of the entertainment industry, leveraging advanced technologies to create unique and engaging environments for audiences. Sphere Entertainment operates iconic venues, such as the Sphere in Las Vegas, and is involved in the production and promotion of a wide range of entertainment content, from live concerts to cutting-edge multimedia shows.

How the Company Makes MoneySphere Entertainment Co. generates revenue primarily through ticket sales for its immersive events and live performances held at its venues. The company also earns income from partnerships and sponsorships with brands seeking to associate with its unique entertainment offerings. Additionally, Sphere Entertainment capitalizes on merchandising opportunities, selling branded products and memorabilia to enhance the customer experience. The company's strategic partnerships with artists, production companies, and technology providers further expand its revenue potential by enabling a diverse range of shows and spectacles. Venue bookings for private events and collaborations with other entertainment entities also contribute to its income.

Sphere Entertainment Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q2-2025)

% Change Since: 27.63%|

Next Earnings Date:Aug 15, 2025

Earnings Call Sentiment Neutral

The earnings call highlights strong revenue performance and growth in the Sphere segment, successful concert residencies, and robust sponsorship demand. However, there are challenges with MSG Networks' declining revenue and subscriber base, a significant goodwill impairment charge, and an operating loss in the Sphere segment. Despite these challenges, the company's strong liquidity position and strategic initiatives suggest a positive outlook.

Q2-2025 Updates

Positive Updates

Total Revenue and Adjusted Operating Income

Sphere Entertainment Company generated total revenues of $308.3 million and adjusted operating income of $32.9 million for the December quarter.

Sphere Segment Revenue Growth

Sphere segment generated $169 million in revenue, with $87 million from Sphere experience across 190 shows in the December quarter, showing strong performance.

Successful Concert Residencies

Kenny Chesney and Backstreet Boys announced for 15 and 18-show residencies, respectively, highlighting strong interest from artists.

Strong Sponsorship and Advertising Demand

Solid advertising demand for the Exosphere at the end of 2024 continues into the new year, indicating robust sponsorship interest.

Cash and Liquidity Position

Company holds $502 million in unrestricted cash and cash equivalents, with $400 million at the Sphere segment, indicating a strong liquidity position.

Negative Updates

MSG Networks Revenue Decline

Revenue decreased to $139.3 million in the December quarter from $146.4 million in the prior year, driven by an approximately 11.5% decrease in subscribers.

Noncash Goodwill Impairment Charge

A $61.2 million noncash goodwill impairment charge was recorded due to ongoing industry challenges facing MSG Networks.

Adjusted Operating Loss in Sphere Segment

Sphere segment reported an adjusted operating loss of $800,000 for the December quarter, reflecting challenges in achieving profitability.

Content Production Costs for Residencies

High content production costs for bands remain a concern, although offset by residency benefits.

Company Guidance

During the Sphere Entertainment Company's earnings call for the fiscal period ending December 31, 2024, the company provided guidance focused on driving profitable growth through several strategic initiatives. Jim Dolan, the Executive Chairman and CEO, highlighted the development of new productions to expand their original content library and the promotion of concert residencies, including upcoming shows by Kenny Chesney and the Backstreet Boys. The company reported total revenues of $308.3 million and an adjusted operating income of $32.9 million for the December quarter. The Sphere segment alone generated $169 million in revenue, though it reported an adjusted operating loss of $800,000. The Sphere experience in Las Vegas has generated over $450 million in high-margin revenue, indicating strong demand and successful pricing strategies. Robert Langer, the new EVP and CFO, mentioned that the company is optimistic about revenue growth and cost efficiencies for the upcoming year, aiming to improve adjusted operating income significantly. The call also touched on expansion plans, with ongoing work on a second Sphere in Abu Dhabi and potential designs for smaller Spheres in other markets. The company ended the year with approximately $502 million in unrestricted cash and cash equivalents, and a debt balance of about $1.36 billion.

Sphere Entertainment Financial Statement Overview

Summary

Sphere Entertainment faces financial challenges with inconsistent revenue growth and profitability pressures. The balance sheet reveals manageable leverage but declining equity stability. Cash flow management shows some improvement, indicating potential for operational stabilization. Overall, the company needs to focus on enhancing profitability and managing its capital structure to ensure financial health.

Income Statement

Neutral

Sphere Entertainment's revenue growth is inconsistent, with a recent revenue decline compared to earlier years. The company has struggled with profitability, as indicated by negative EBIT and net income margins in TTM, reflecting operational challenges. Gross profit is positive but insufficient to cover operating expenses, leading to negative net profits.

Balance Sheet

Neutral

Sphere Entertainment maintains a moderate debt-to-equity ratio, indicating manageable leverage, but has a declining equity ratio, suggesting increased liabilities relative to assets. Despite a stable asset base, the reduction in stockholders' equity over time is a concern. ROE is negative, highlighting profitability challenges.

Cash Flow

Neutral

The cash flow situation is mixed, with recent positive free cash flow but volatile operating cash flows over different periods. The free cash flow to net income ratio is concerning due to persistent net losses. However, improvements in operating cash flow in the TTM suggest potential stabilization.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
1.13B	1.03B	573.83M	610.05M	647.51M	1.44B
	Gross Profit
385.77M	479.06M	231.62M	289.78M	384.65M	645.52M
	EBIT
-337.83M	-341.24M	-273.04M	-165.74M	64.51M	235.21M
	EBITDA
-462.20M	-3.44M	405.62M	-16.38M	193.75M	210.04M
	Net Income Common Stockholders
-325.06M	-200.65M	502.77M	-194.40M	-148.15M	181.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
241.07M	559.76M	131.97M	747.31M	1.52B	1.24B
	Total Assets
3.08B	4.79B	4.97B	5.52B	5.29B	3.73B
	Total Debt
0.00	1.52B	1.32B	1.09B	2.01B	261.16M
	Net Debt
-241.07M	958.99M	1.19B	339.19M	494.59M	-645.39M
	Total Liabilities
675.41M	2.37B	2.39B	3.36B	2.97B	844.77M
	Stockholders Equity
1.71B	2.42B	2.58B	1.96B	2.17B	2.86B
Cash Flow		Free Cash Flow
35.18M	-309.41M	-905.39M	-615.38M	-514.70M	-149.18M
	Operating Cash Flow
69.41M	-19.66M	153.59M	141.34M	-58.69M	308.12M
	Investing Cash Flow
-106.31M	-45.18M	-653.92M	-804.16M	-123.18M	-394.53M
	Financing Cash Flow
-74.17M	209.73M	85.54M	-30.39M	592.68M	-113.87M

Sphere Entertainment Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price37.00

Price Trends

50DMA

31.98

Positive

100DMA

36.51

Positive

200DMA

39.56

Negative

Market Momentum

MACD

1.64

Positive

RSI

59.13

Neutral

STOCH

52.54

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPHR, the sentiment is Neutral. The current price of 37 is below the 20-day moving average (MA) of 37.17, above the 50-day MA of 31.98, and below the 200-day MA of 39.56, indicating a neutral trend. The MACD of 1.64 indicates Positive momentum. The RSI at 59.13 is Neutral, neither overbought nor oversold. The STOCH value of 52.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SPHR.

Sphere Entertainment Risk Analysis

Sphere Entertainment disclosed 57 risk factors in its most recent earnings report. Sphere Entertainment 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 1 New Risks

Material impairments in the value of our long-lived assets and goodwill could negatively affect our business and results of operations. Q3, 2024

Sphere Entertainment Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNK	74 Outperform	$3.72B	21.33	71.46%	0.51%	-0.80%	13.07%
IMAX	74 Outperform	$1.50B	59.81	9.00%	―	-1.98%	-1.18%
PLAY	66 Neutral	$749.27M	17.04	29.37%	―	-3.30%	-48.76%
MSGE	63 Neutral	$1.76B	13.64	1222.83%	―	5.81%	133.05%
Sector *	61 Neutral	$14.35B	5.84	-4.31%	3.69%	2.75%	-35.67%
SPHR	56 Neutral	$1.37B	―	-15.64%	―	-5.04%	-155.66%
AMC	49 Neutral	$1.44B	―	20.03%	―	-5.43%	26.07%

* Communication Services Sector Average

Performance Comparison

SPHR

Sphere Entertainment

37.33

0.61

1.66%

CNK

Cinemark Holdings

31.56

14.86

88.98%

IMAX

27.47

12.35

81.68%

AMC

AMC Entertainment

3.40

-1.51

-30.75%

PLAY

Dave & Busters Entertainment

22.64

-26.25

-53.69%

MSGE

Madison Square Garden Entertainment Corp.

37.90

3.67

10.72%

Sphere Entertainment Corporate Events

Executive/Board ChangesShareholder Meetings

Sphere Entertainment Holds Annual Meeting with Key Votes

Neutral

Jun 5, 2025

Sphere Entertainment held its Annual Meeting on June 4, 2025, where Class A and Class B stockholders voted on several key proposals. The election of directors for both classes was completed, with Class A electing four directors and Class B electing eleven directors. Additionally, stockholders ratified the appointment of the independent registered public accounting firm for the fiscal year ending December 31, 2025, approved executive compensation in a non-binding vote, and agreed to redomesticate the company from Delaware to Nevada.

The most recent analyst rating on (SPHR) stock is a Buy with a $57.00 price target. To see the full list of analyst forecasts on Sphere Entertainment stock, see the SPHR Stock Forecast page.

Executive/Board ChangesShareholder Meetings

Sphere Entertainment Director Carl E. Vogel to Step Down

Neutral

Mar 28, 2025

On March 24, 2025, Carl E. Vogel, a director elected by holders of the Class A Common Stock of Sphere Entertainment Co., announced he will not seek re-election at the upcoming 2025 Annual Meeting of Stockholders scheduled for June 4, 2025. Vogel’s decision is not due to any disagreements with the company, and he will continue his roles on the Compensation and Audit Committees until his term concludes.

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.