Exploring Lionsgate (LION) Valuation: Is the Studio’s Recent Momentum Pointing to Hidden Value?

Lionsgate Studios (LION) shares have moved quietly in recent trading, with investors weighing the latest trends in the media and entertainment sector. The stock's returns over the past month and 3 months suggest a modest upswing.

See our latest analysis for Lionsgate Studios.

Lionsgate Studios has shown a burst of momentum recently, with a 30-day share price return of 14.2% and a 90-day gain of 16.5%, even as the year-to-date share price is still down. Taking a longer view, the studio’s 1-year total shareholder return stands at 13.8%. This suggests that while near-term sentiment remains cautious, longer-term investors have seen meaningful gains as market confidence slowly rebuilds.

If you’re curious to see how other media and entertainment stocks are moving lately, it’s worth broadening your search and discovering fast growing stocks with high insider ownership

Yet with recent gains and analyst price targets still above current levels, the question remains: Is Lionsgate Studios stock trading at a discount to its true value, or is the market already factoring in any future growth potential?

Most Popular Narrative: 14.8% Undervalued

Lionsgate Studios’ widely-followed valuation narrative points to a fair value well above the last close of $7.34, indicating significant upside that many investors might be overlooking.

Lionsgate is leveraging its franchise-building strategy to expand popular IPs (Hunger Games, John Wick, Saw, Twilight) across film, TV, animation, games, virtual experiences, and live shows. The company is tapping into the growing demand for multi-platform, cross-medium content and creating new recurring revenue streams, which is expected to drive top-line revenue growth and provide greater earnings visibility.

Read the complete narrative.

Want to know what bold financial forecasts justify this premium? The narrative hinges on a future profit rebound, ambitious margin transformation, and a projected earnings multiple that sparks debate. Are you curious which figures underpin this eye-catching upside?

Result: Fair Value of $8.61 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Lionsgate’s heavy reliance on unpredictable box office hits and rising competition from larger entertainment giants could undermine these optimistic projections.

Find out about the key risks to this Lionsgate Studios narrative.

Another View: Testing the Numbers with Multiples

While analyst forecasts point to upside, Lionsgate Studios is trading at a price-to-sales ratio of just 0.6x. This figure stands out as notably lower than both its peer average of 2.9x and the broader US Entertainment industry at 1.4x, and it even sits just below the fair ratio of 0.7x. Such a gap can signal untapped value, but it also raises the question of whether investor caution is justified or if opportunity is being overlooked. Are the market’s low expectations setting up a value surprise, or do they reflect real risks?

See what the numbers say about this price — find out in our valuation breakdown.

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 928 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 want to take a different perspective or dive deeper into the numbers, you can quickly shape your own view using the tools provided. Do it your way.

A great starting point for your Lionsgate Studios research is our analysis highlighting 3 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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