LION Stock Forecast & Price Target

Lionsgate Studios Corp has demonstrated significant growth in its library revenues, increasing to $1 billion over the past twelve months, largely driven by strong demand for premium content and contributing to a historical trend of higher valuation compared to other media companies. The company's television segment has substantially improved its profitability, now constituting roughly 30% of the library revenue, aided by successful digital home entertainment releases. Furthermore, the 31% sequential increase in the backlog to $1.6 billion, driven mainly by television commitments, alongside total revenues of $3.2 billion for fiscal 2025 reflecting a robust recovery, supports a strong outlook for EBITDA improvement and overall financial stability.

Lionsgate Studios Corp. experienced a 15% decline in OIBDA for fiscal 2025, primarily attributed to underperformance in its Motion Picture Segment, compounded by reduced theatrical releases compared to the prior year. Revenue from its television segment has stagnated, with a significant dependency on Starz leading to concerns about growth, particularly as contributions from non-Starz revenue sources have remained flat since 2018. Additionally, the rising costs associated with marketing and the decline in Home Entertainment revenue, exacerbated by a shift towards streaming, further reflect the company’s struggles to maintain profitability amid evolving market conditions.