Back to top

Analyst Blog

Shares of Lions Gate Entertainment Corp. (LGF - Analyst Report) reached a new 52-week high of $24.15 on Thursday, Mar 28, owing to the company’s strategic initiatives aimed at enhancing its long-term profitability.

The company’s stock eventually closed at $23.77, recording a robust return of 40.9% year to date. The company currently trades at a forward P/E of 25.7x, a 12.7% premium to the peer group average of 22.81x.

Lions Gate is a film studio engaged in the production and distribution of motion pictures for theater and straight-to-video release as well as television programming for cable and broadcast networks.

The company has been active in making strategic acquisitions and alliances to enhance its competitive position, maximize return and build a diversified portfolio for future growth. The string of acquisitions includes companies like Summit Entertainment, Artisan, Debmar-Mercury, Trimark, Redbus, TV Guide Network and Mandate.

These acquisitions will further expand its filmed entertainment library while boosting its feature film and home entertainment offerings.

During the last concluded quarter, Lions Gate posted earnings of 37 cents a share, that improved significantly from the loss of a penny registered in the comparable year-ago quarter and came way ahead of the Zacks Consensus Estimate of 24 cents. Including one time items, earnings came in at 27 cents a share.

Total revenue more than doubled during the quarter to $743.6 million, driven by sturdy performance of the theatrical segment, which reflected solid performance of The Twilight Saga: Breaking Dawn – Part 2 and other films. Moreover revenue gains at Home Entertainment and International businesses boosted the results. The reported revenue handily surpassed the Zacks Consensus Estimate of $686 million.

At the end of the quarter, the company’s filmed entertainment backlog totaled $1.2 billion, reflecting strong future revenues, which is encouraging.

Currently, Lions Gate, which competes with other major studios, such as News Corp’s. (NWSA - Analyst Report) Fox Entertainment Group, The Walt Disney Company (DIS - Analyst Report) and Time Warner Inc. (TWX - Analyst Report), maintains a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.