GICS Sector : Communication Services
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.
Sphere Entertainment Co. reported total revenues of $262.5 million and adjusted operating income of $36.4 million for its Fiscal 2025 Third Quarter. The company's EPS came in at -$2.71, missing estimates of -$1.57. The Sphere segment was a significant contributor, generating $174.1 million in revenues, a 37% increase from the prior-year period, driven by higher revenues from the Sphere Experience, including the successful Wizard of Oz residency, which has sold over 1 million tickets and generated over $130 million in ticket sales. The MSG Networks segment also performed well, with revenues of $88.4 million and AOI of $19.3 million.
Publication Date: Nov -17
The company's investment in technology and content is paying off, with the introduction of Sphere Immersive Sound at Radio City Music Hall and the development of new experiences like From the Edge, which will utilize live capture and Big Sky system. The success of the Wizard of Oz residency has generated significant interest from potential partners, with James Dolan noting it "opened up the floodgates" in terms of interest. The company is exploring ways to monetize its technology, including licensing it to third-party venues.
The company remains optimistic about growth, particularly with the Sphere, and expects a high barrier of growth for Exosphere advertising and sponsorships in the next calendar year. Analysts estimate next year's revenue growth at 8.4%. The company's pipeline is booked through September 2027, and it is in discussions with potential financing partners for a Sphere in Abu Dhabi.
With a P/S Ratio of 2.55 and an EV/EBITDA of 10.68, the company's valuation appears reasonable, considering its growth prospects. However, the negative EPS and ROE of -7.19% are concerns. The company's Net Debt / EBITDA ratio of 2.01 is manageable, but investors should monitor its debt levels. The current valuation metrics suggest that the market has priced in some growth, but there is still potential for upside.
The MSG Networks segment continues to face challenges, with the shift to streaming impacting monetization. However, the company remains committed to this business and sees potential for strategic acquisitions. The regional sports product remains a powerful offering, and the company is working towards a single, seamless offering for consumers in the New York market.
The Wizard of Oz at Sphere Reaches More Than 1.5 Million Total Tickets Sold and Nearly $200 Million in Ticket Sales
Dec -02
Sphere Entertainment Co. $SPHR Shares Acquired by Geode Capital Management LLC
Nov -29
Relative Strength Line Identified Sphere Stock As A Winner
Nov -28
Bring Home the Sound of Sphere With “The Wizard of Oz at Sphere: The Soundtrack”
Nov -07
Sphere Entertainment (NYSE:SPHR) Shares Up 7.3% Following Earnings Beat
Nov -05
Sphere Entertainment Co. (SPHR) Q3 2025 Earnings Call Transcript
Nov -04
Compared to Estimates, Sphere Entertainment (SPHR) Q3 Earnings: A Look at Key Metrics
Nov -04
Sphere Entertainment (SPHR) Reports Q3 Loss, Tops Revenue Estimates
Nov -04
MSG Networks' 1.5% growth is driven by increasing demand for live sports and entertainment content, particularly in the New York metropolitan area. The company's strong brand portfolio, including the New York Knicks and New York Rangers, contributes to its growth. Additionally, MSG Networks' focus on digital media and subscription-based services, such as MSG+, also supports its growth momentum.
Sphere's 2.0 growth is driven by increasing demand for immersive gaming experiences, strategic partnerships with popular esports teams, and expansion into new markets such as virtual events and social platforms. Additionally, continuous innovation in VR/AR technology and a strong online community contribute to the segment's rapid growth.
A live event streaming platform that enables users to broadcast and watch live events in real-time.
A cloud-based gaming platform that allows users to play high-quality games on any device with an internet connection.
A digital content creation platform that provides users with a suite of tools to create and edit videos, images, and music.
A social networking platform that enables users to connect with others who share similar interests and passions.
An online learning platform that provides access to a vast library of educational courses and resources.
The threat of substitutes for Sphere Entertainment Co. is moderate due to the presence of alternative forms of entertainment such as outdoor activities and social media.
The bargaining power of customers is high due to the availability of multiple entertainment options and the ease of switching to alternative providers.
The bargaining power of suppliers is low due to the company's large scale of operations and its ability to negotiate favorable terms with suppliers.
The threat of new entrants is moderate due to the significant capital requirements and regulatory hurdles that new entrants would need to overcome.
The intensity of rivalry is high due to the presence of several established players in the entertainment industry, leading to intense competition for market share.
| Value | |
|---|---|
| Debt Weight | 33.83% |
| Debt Cost | 11.24% |
| Equity Weight | 66.17% |
| Equity Cost | 11.24% |
| WACC | 11.24% |
| Leverage | 51.14% |
Value: 7.4
Growth: 4.0
Quality: 4.6
Yield: 3.0
Momentum: 4.0
Volatility: 6.0
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Value: 7.7
Growth: 2.1
Quality: 4.2
Yield: 0.0
Momentum: 8.5
Volatility: 3.3
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Value: 3.5
Growth: 4.3
Quality: 4.3
Yield: 0.0
Momentum: 7.5
Volatility: 5.3
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Value: 5.7
Growth: 4.0
Quality: 4.7
Yield: 0.0
Momentum: 6.0
Volatility: 2.7
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Value: 9.6
Growth: 6.8
Quality: 4.0
Yield: 0.0
Momentum: 1.5
Volatility: 1.0
1-Year Total Return ->
Value: 6.3
Growth: 5.9
Quality: 3.3
Yield: 0.0
Momentum: 1.0
Volatility: 2.3
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