Sphere Entertainment (SPHR) AI Stock Analysis

• Market Cap: $1.37B
• Dividend Yield: N/A
• Average Volume (3M): 652.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.71
• Revenue Growth: -5.04%
• EPS Growth: -155.66%
• Country: US
• Employees: 1,080
• Sector: Communication Services
• Sector Strength: 88
• Industry: Entertainment
• EPS (TTM): -2.27
• Shares Outstanding: 29,132,664
• 10 Day Avg. Volume: 489,978
• 30 Day Avg. Volume: 652,017
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.05
• Enterprise Value/Market Cap: 1.56
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 5.08
• Enterprise Value/Ebitda: -15.22
• 1Y Price Target: $46.29
• Price Target Upside: 20.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 56 Neutral
• Price Target: $38.00 ▼(-1.14%Downside)

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 Potential

The high-margin licensing revenues from the Abu Dhabi Sphere are expected to build over time.

Negative Factors

Expansion Risk

Management's focus on expanding the Sphere platform globally and pursuing scaled-down versions in smaller cities fundamentally misunderstands the product’s core appeal and economic limitations.

Financial Decline

Sphere Experience revenue declined 14% YoY, while advertising and sponsorship fell 16%, highlighting deteriorating fundamentals.

Negative Cash Flow

Free cash flow for the Sphere business, including Las Vegas and Abu Dhabi, is expected to remain modestly negative until 2029.

Sphere Entertainment Business Overview & Revenue Model

Company Description

Sphere Entertainment Co. 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 formerly known as Madison Square Garden Entertainment Corp. and changed its name to Sphere Entertainment Co. in April 2023. Sphere Entertainment Co. was founded in 2006 and is based in New York, New York.

How the Company Makes Money

Sphere 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 Financial Statement Overview

Summary

Sphere Entertainment faces significant financial challenges, particularly in profitability and cash flow management. While gross profit margins are relatively healthy, the company struggles with negative net income and cash flow inefficiencies. The balance sheet remains stable, but overall, the company must address operational inefficiencies and improve cash flow generation to enhance financial health.

Income Statement

Sphere Entertainment shows a mixed performance in its income statement. The TTM data reveals a gross profit margin of 38.59%, indicating moderate profitability. However, a concerning trend is evident with a negative net profit margin of -32.99% and a declining revenue growth rate from the previous year at 6.16%. The company faces challenges in EBIT and EBITDA margins, both in negative territory at -34.97% and -4.18%, respectively, reflecting operational inefficiencies.

Balance Sheet

The balance sheet presents a stable yet cautious outlook. The debt-to-equity ratio is at 0.68, suggesting a manageable level of leverage. The equity ratio stands at 48.17%, supporting a stable capital structure. However, the return on equity is negative at -16.79%, indicating difficulties in generating returns for shareholders.

Cash Flow

Sphere Entertainment’s cash flow statement displays considerable challenges. The free cash flow growth rate is negative, and both the operating cash flow to net income and free cash flow to net income ratios are unfavorable, reflecting cash flow inefficiencies. The operating cash flow to net income ratio is -0.07, underscoring difficulties in converting sales into cash.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.09B	1.03B	573.83M	610.05M	647.51M	1.44B
	Gross Profit
420.60M	484.79M	231.62M	289.78M	384.65M	645.52M
	EBIT
-381.22M	-341.24M	-273.04M	-165.74M	64.51M	235.21M
	EBITDA
-45.56M	-23.86M	405.62M	-16.38M	193.75M	210.04M
	Net Income Common Stockholders
-359.77M	-200.65M	502.77M	-194.40M	-148.15M	181.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
465.02M	559.76M	131.97M	747.31M	1.52B	1.24B
	Total Assets
4.45B	4.79B	4.97B	5.52B	5.29B	3.73B
	Total Debt
1.46B	1.52B	1.32B	1.09B	2.01B	261.16M
	Net Debt
996.81M	958.99M	1.19B	339.19M	494.59M	-645.39M
	Total Liabilities
2.31B	2.37B	2.39B	3.36B	2.97B	844.77M
	Stockholders Equity
2.14B	2.42B	2.58B	1.96B	2.17B	2.86B
Cash Flow		Free Cash Flow
-57.52M	-309.41M	-905.39M	-615.38M	-514.70M	-149.18M
	Operating Cash Flow
-25.26M	-19.66M	153.59M	141.34M	-58.69M	308.12M
	Investing Cash Flow
-102.67M	-45.18M	-653.92M	-804.16M	-123.18M	-394.53M
	Financing Cash Flow
-87.51M	209.73M	85.54M	-30.39M	592.68M	-113.87M

Sphere Entertainment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 38.44
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPHR, the sentiment is Positive. The current price of 38.44 is above the 20-day moving average (MA) of 38.08, above the 50-day MA of 33.29, and below the 200-day MA of 39.11, indicating a neutral trend. The MACD of 1.23 indicates Positive momentum. The RSI at 56.72 is Neutral, neither overbought nor oversold. The STOCH value of 49.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPHR.

Sphere Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMAX	77 Outperform	$1.57B	63.03	9.00%	―	-1.98%	-1.18%
CNK	74 Outperform	$3.67B	21.09	71.46%	0.98%	-0.80%	13.07%
PLAY	64 Neutral	$1.13B	32.29	17.57%	―	-3.82%	-56.18%
MSGE	63 Neutral	$1.76B	13.68	1222.83%	―	5.81%	133.05%
Sector *	61 Neutral	$14.68B	5.92	-3.83%	7.51%	2.79%	-33.07%
SPHR	56 Neutral	$1.37B	―	-15.64%	―	-5.04%	-155.66%
AMC	47 Neutral	$1.36B	―	20.03%	―	-5.43%	26.07%

Sphere Entertainment Corporate Events

Sphere Entertainment Holds Annual Meeting with Key Votes

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.

Sphere Entertainment Director Carl E. Vogel to Step Down

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.