Lions Gate shareholders give nod to split into two firms
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 23 2025
0mins
Should l Buy LION?
Source: SeekingAlpha
Lions Gate Entertainment Corp. Separation: Lions Gate has approved a plan to separate its film and TV studio from the Starz pay-TV service, with investors set to receive shares in the new entity, Lionsgate Studios Corp.
Regulatory Steps and Future Structure: The company filed a registration statement with the SEC for this separation, aiming for a structure with a single class of common shares that offers one vote per share.
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Analyst Views on LION
Wall Street analysts forecast LION stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LION is 9.30 USD with a low forecast of 8.00 USD and a high forecast of 11.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 8.820
Low
8.00
Averages
9.30
High
11.00
Current: 8.820
Low
8.00
Averages
9.30
High
11.00
About LION
Lionsgate Studios Corp. is a pure play content company. The Company brings together diversified motion picture and television production and distribution businesses, a portfolio of brands and franchises, a talent management and production house and a more than 20,000-title film and television library. The Company's Motion Picture segment consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired. Its Television Production segment consists of the development, production and worldwide distribution of television productions, including television series, television movies and miniseries, and non-fiction programming. Television Production segment also includes the operations of 3 Arts Entertainment, a talent management company.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Lionsgate Studios Q3 Earnings Call Highlights Strong Growth Outlook
- Strong Financial Performance: Lionsgate reported Q3 revenue of $724 million, a 1% year-over-year increase, with adjusted OIBDA at $85 million, indicating sustained profitability in content creation and distribution, despite a fully diluted loss per share of $0.16, the adjusted earnings per share of $0.01 reflects proactive financial management.
- Record Library Revenue: The company achieved trailing 12-month library revenue of $1.05 billion, a 10% year-over-year growth, marking the fifth consecutive quarter of record highs, demonstrating significant progress in monetizing content assets and enhancing market competitiveness.
- Strategic Investments and Governance: Lionsgate announced the addition of Steven Mnuchin to its board and plans to convert to a single class of stock, indicating proactive adjustments in governance structure aimed at enhancing shareholder value and boosting market confidence.
- Optimistic Future Outlook: Management expects significant adjusted OIBDA growth in fiscal '27 driven by the launch of The Housemaid and other key releases, reflecting a strong alignment between content production and market demand, further solidifying its leadership position in the media industry.
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- Movie Trailer Lineup: Comcast and Disney are set to feature multiple upcoming movie trailers during Super Bowl LX, including family-friendly films and less suitable options like 'Scream 7' and 'Disclosure Day', indicating a significant advertising investment from both companies.
- Disney's Advertising Strategy: Disney will unveil the trailer for its first Star Wars theatrical film since 2018, alongside ads for 'Hopper' and 'Toy Story 5', continuing its tradition of frequently showcasing movie trailers during the Super Bowl.
- Lionsgate's Comeback: Lionsgate will debut the trailer for the Michael Jackson biopic 'Michael', marking the company's first Super Bowl ad since 2016, demonstrating confidence in this highly anticipated music biopic.
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Lionsgate Studios Q3 Earnings Highlights
- Earnings Performance: Lionsgate Studios reported a non-GAAP EPS of $0.01 for Q3, missing expectations by $0.01, indicating pressure on profitability; however, revenue reached $724.3 million, up 15.3% year-over-year, exceeding forecasts by $20.34 million, showcasing strong revenue growth.
- Stock Reaction: Despite the earnings miss, Lionsgate's shares rose by 1.93%, reflecting market recognition of its revenue growth, which may attract short-term investor interest and support stock stability.
- Executive Appointment: The appointment of former Treasury Secretary Steven Mnuchin to the board may enhance Lionsgate's financial management and policy insights, potentially boosting investor confidence and strategic direction.
- New Project Development: Lionsgate is set to create a TV series based on the history of English Premier League club Manchester United, demonstrating its strategic intent in content diversification and brand partnerships aimed at attracting a broader audience and enhancing brand value.
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Lionsgate Appoints Former Treasury Secretary Mnuchin to Board
- New Board Member: Lionsgate has appointed former U.S. Treasury Secretary Steven Mnuchin to its Board of Directors, effective immediately, aiming to leverage his extensive experience in global finance to enhance corporate governance and strategic decision-making.
- Financial Background: Mnuchin's previous roles include Partner and CIO at Goldman Sachs, and Founder, Chairman, and CEO of Dune Capital Management and OneWest Bank, showcasing a robust background in financial services that could bolster Lionsgate's adaptability in complex market environments.
- Production Experience: As a co-financier of the blockbuster Avatar, Mnuchin holds over 35 executive producer credits, which could provide Lionsgate with fresh perspectives and resources in content creation and market promotion.
- Market Reaction: This appointment may positively impact Lionsgate's stock price, particularly against the backdrop of rising debt and recent rating downgrades, with Mnuchin's addition seen as a move to bolster investor confidence.
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Manchester United Strikes Multi-Million Pound TV Deal with Lionsgate
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- Future Revenue Sharing: The agreement stipulates that future royalties will be shared between Manchester United and Lionsgate, with the value increasing based on the number of seasons, episodes, and the size of any deal, providing the club with a sustainable financial benefit and enhancing its long-term financial stability.
- Creative Team Involvement: British writer and director Jed Mercurio, known for hit series Bodyguard and Line of Duty, is involved in discussions about the project and is a lifelong Manchester United fan, which will help ensure the show's quality and appeal, further enhancing the club's cultural influence.
- Market Potential Analysis: The show's concept is similar to Netflix's popular historical drama The Crown, and if successfully launched, it is expected to attract global Manchester United fans and history drama enthusiasts, potentially creating new revenue streams and increasing the club's visibility and influence in the global market.
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- Top Films Leading the Charge: Four Disney films ranked among the top ten highest-grossing domestic releases of 2025, including the live-action remake of Lilo & Stitch, Zootopia 2, Marvel's The Fantastic Four: First Steps, and Avatar: Fire and Ash, further solidifying its brand influence among audiences.
- Future Film Plans: Disney is set to release several highly anticipated films in 2026, including its first Star Wars film since 2019 titled The Mandalorian and Grogu, along with Toy Story 5 and Avengers: Doomsday, which are expected to drive continued box office growth.
- Market Trend Analysis: According to Comscore, nine of the ten biggest films in 2025 were based on existing intellectual properties, highlighting the market's preference for well-known brands, and with its robust IP portfolio, Disney is expected to maintain a competitive edge in future box office battles.
See More
Lionsgate Studios Q3 Earnings Call Highlights Strong Growth Outlook
- Strong Financial Performance: Lionsgate reported Q3 revenue of $724 million, a 1% year-over-year increase, with adjusted OIBDA at $85 million, indicating sustained profitability in content creation and distribution, despite a fully diluted loss per share of $0.16, the adjusted earnings per share of $0.01 reflects proactive financial management.
- Record Library Revenue: The company achieved trailing 12-month library revenue of $1.05 billion, a 10% year-over-year growth, marking the fifth consecutive quarter of record highs, demonstrating significant progress in monetizing content assets and enhancing market competitiveness.
- Strategic Investments and Governance: Lionsgate announced the addition of Steven Mnuchin to its board and plans to convert to a single class of stock, indicating proactive adjustments in governance structure aimed at enhancing shareholder value and boosting market confidence.
- Optimistic Future Outlook: Management expects significant adjusted OIBDA growth in fiscal '27 driven by the launch of The Housemaid and other key releases, reflecting a strong alignment between content production and market demand, further solidifying its leadership position in the media industry.
See More
Super Bowl LX Ads Cost Up to $10 Million for 30 Seconds
- High Advertising Costs: Super Bowl LX commands a staggering $8 million to $10 million for a 30-second ad spot, enticing numerous companies to showcase their products and brands during the NFL championship on February 8, which is expected to attract over 100 million viewers.
- Movie Trailer Lineup: Comcast and Disney are set to feature multiple upcoming movie trailers during Super Bowl LX, including family-friendly films and less suitable options like 'Scream 7' and 'Disclosure Day', indicating a significant advertising investment from both companies.
- Disney's Advertising Strategy: Disney will unveil the trailer for its first Star Wars theatrical film since 2018, alongside ads for 'Hopper' and 'Toy Story 5', continuing its tradition of frequently showcasing movie trailers during the Super Bowl.
- Lionsgate's Comeback: Lionsgate will debut the trailer for the Michael Jackson biopic 'Michael', marking the company's first Super Bowl ad since 2016, demonstrating confidence in this highly anticipated music biopic.
See More
Lionsgate Studios Q3 Earnings Highlights
- Earnings Performance: Lionsgate Studios reported a non-GAAP EPS of $0.01 for Q3, missing expectations by $0.01, indicating pressure on profitability; however, revenue reached $724.3 million, up 15.3% year-over-year, exceeding forecasts by $20.34 million, showcasing strong revenue growth.
- Stock Reaction: Despite the earnings miss, Lionsgate's shares rose by 1.93%, reflecting market recognition of its revenue growth, which may attract short-term investor interest and support stock stability.
- Executive Appointment: The appointment of former Treasury Secretary Steven Mnuchin to the board may enhance Lionsgate's financial management and policy insights, potentially boosting investor confidence and strategic direction.
- New Project Development: Lionsgate is set to create a TV series based on the history of English Premier League club Manchester United, demonstrating its strategic intent in content diversification and brand partnerships aimed at attracting a broader audience and enhancing brand value.
See More
Lionsgate Appoints Former Treasury Secretary Mnuchin to Board
- New Board Member: Lionsgate has appointed former U.S. Treasury Secretary Steven Mnuchin to its Board of Directors, effective immediately, aiming to leverage his extensive experience in global finance to enhance corporate governance and strategic decision-making.
- Financial Background: Mnuchin's previous roles include Partner and CIO at Goldman Sachs, and Founder, Chairman, and CEO of Dune Capital Management and OneWest Bank, showcasing a robust background in financial services that could bolster Lionsgate's adaptability in complex market environments.
- Production Experience: As a co-financier of the blockbuster Avatar, Mnuchin holds over 35 executive producer credits, which could provide Lionsgate with fresh perspectives and resources in content creation and market promotion.
- Market Reaction: This appointment may positively impact Lionsgate's stock price, particularly against the backdrop of rising debt and recent rating downgrades, with Mnuchin's addition seen as a move to bolster investor confidence.
See More
Manchester United Strikes Multi-Million Pound TV Deal with Lionsgate
- Historical Drama Agreement: Manchester United has reached a deal with U.S. media production company Lionsgate to create a TV show based on the club's history, ensuring a guaranteed sum in the low multi-million pounds, which could significantly enhance the club's brand value and revenue potential if the show is produced and sold.
- Future Revenue Sharing: The agreement stipulates that future royalties will be shared between Manchester United and Lionsgate, with the value increasing based on the number of seasons, episodes, and the size of any deal, providing the club with a sustainable financial benefit and enhancing its long-term financial stability.
- Creative Team Involvement: British writer and director Jed Mercurio, known for hit series Bodyguard and Line of Duty, is involved in discussions about the project and is a lifelong Manchester United fan, which will help ensure the show's quality and appeal, further enhancing the club's cultural influence.
- Market Potential Analysis: The show's concept is similar to Netflix's popular historical drama The Crown, and if successfully launched, it is expected to attract global Manchester United fans and history drama enthusiasts, potentially creating new revenue streams and increasing the club's visibility and influence in the global market.
See More
Disney (DIS) Captures 27.5% of U.S. Box Office in 2025, Leading the Market
- Strong Box Office Performance: In 2025, U.S. and Canadian box office ticket sales rose approximately 4% year-over-year to $9.05 billion, with Disney (DIS) capturing a significant 27.5% market share, translating to $2.49 billion in sales, underscoring its competitive strength in the market.
- Top Films Leading the Charge: Four Disney films ranked among the top ten highest-grossing domestic releases of 2025, including the live-action remake of Lilo & Stitch, Zootopia 2, Marvel's The Fantastic Four: First Steps, and Avatar: Fire and Ash, further solidifying its brand influence among audiences.
- Future Film Plans: Disney is set to release several highly anticipated films in 2026, including its first Star Wars film since 2019 titled The Mandalorian and Grogu, along with Toy Story 5 and Avengers: Doomsday, which are expected to drive continued box office growth.
- Market Trend Analysis: According to Comscore, nine of the ten biggest films in 2025 were based on existing intellectual properties, highlighting the market's preference for well-known brands, and with its robust IP portfolio, Disney is expected to maintain a competitive edge in future box office battles.
See More
