Lionsgate Studios (LION): Rethinking Valuation After a 22% One‑Month Share Price Rebound
Lionsgate Studios (LION) has quietly outperformed the broader market over the past month, climbing roughly 22%. That move, despite ongoing revenue pressure and losses, has investors rethinking how to value its content pipeline.
See our latest analysis for Lionsgate Studios.
That surge sits on top of a solid backdrop, with a roughly 22% 30 day share price return and a much stronger 1 year total shareholder return. This hints that sentiment is turning more constructive even as fundamentals remain mixed.
If Lionsgate’s rebound has you rethinking entertainment plays, it might be worth scanning fast growing stocks with high insider ownership for other under the radar stories with rising momentum.
With shares trading slightly below analyst targets but still posting losses and shrinking revenue, investors face a familiar dilemma: is Lionsgate a discounted play on a valuable content library, or has the market already priced in future growth?
Most Popular Narrative Narrative: 4% Undervalued
With Lionsgate Studios last closing at $8.31 against a most popular narrative fair value of $8.61, the story leans modestly in favor of upside potential while hinging on a complex long term earnings transformation.
The company is capitalizing on the global proliferation of streaming platforms and the ongoing shift to on demand viewing by expanding international licensing, launching proprietary FAST channels, and partnering with new digital distribution platforms (e.g., Roku, YouTube, Roblox), enhancing monetization of its extensive content library and improving margins as global content demand rises.
Curious how shrinking revenue can still support a richer future profit multiple, rising margins, and a premium growth story narrative? Dig into the full breakdown behind that call.
Result: Fair Value of $8.61 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, several industry headwinds, including volatile box office results and intensifying competition from larger streaming platforms, could quickly undermine the bullish margin and growth assumptions.
Find out about the key risks to this Lionsgate Studios narrative.
Another View: DCF Sends a Different Signal
Our DCF model paints a less generous picture, putting fair value closer to $6.96, which makes the current $8.31 share price look overvalued. If the cash flows do not ramp as fast as hoped, today’s small narrative upside could quickly flip into downside risk. Do you trust the story or the math?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Lionsgate Studios for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 914 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Lionsgate Studios Narrative
If you see the story differently, or want to stress test the assumptions with your own research, you can build a fresh view in under 3 minutes: Do it your way.
A great starting point for your Lionsgate Studios research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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