One-glance verdict
Undervalued
$193.48 our estimate vs market $75.75
Wall Street consensus: $91.62 (-52.6% lower than our fair-value estimate)
61% below our estimate, below the bear case
Fundamentals snapshot
Madison Square Garden Entertainment Corp.
MSGE · NYQ · Communication Services · Entertainment
Current price
$75.75
52-week range
$41.65 - $90.41
Market cap
$3.58B
Balance sheet
Distressed
4.24x Stretched
Net debt $881.77M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 12.5% last year.
- Reward Returns 407.5% on equity, ahead of 80% of its peers.
- Risk Stock trades 51.5% above its 5-year average P/E.
- Risk Operating margin compressed from 13.5% to -4.7% over 3 years.
What this company does
Madison Square Garden Entertainment Corp.
Madison Square Garden Entertainment owns and operates famous live performance venues, including Madison Square Garden and Radio City Music Hall in New York. The company's main business is hosting events like concerts, sports, and its own productions, such as the Christmas Spectacular. Therefore, its success depends heavily on its ability to book popular acts and sell enough tickets to fill these large venues.
How the company got here
Madison Square Garden Entertainment Corp. (MSGE) became a standalone company in April 2020 when it was separated from the sports-focused Madison Square Garden Sports Corp. This move was designed to create two distinct companies, one focused on live entertainment and the other on professional sports teams like the New York Knicks and New York Rangers. In a further refinement of its business in April 2023, the original entertainment company was renamed Sphere Entertainment, and it spun off its traditional live event venues and the iconic Christmas show into the current version of Madison Square Garden Entertainment Corp. This history, involving several corporate restructurings, has resulted in the company we see today, which is sharply focused on its portfolio of famous performance venues.
What it actually does
Madison Square Garden Entertainment is in the business of live experiences. The company owns and operates a collection of iconic venues where it hosts a wide variety of events, including concerts, sporting events, family shows, and performing arts. Think of them as the owners of the stage where famous musicians, sports teams, and performers create memorable moments for millions of people each year. In addition to providing the space, the company also produces its own world-famous show, the Christmas Spectacular Starring the Radio City Rockettes.
Entertainment
This is the company's main line of business and represents the vast majority of its operations. It includes the ownership and operation of legendary venues like Madison Square Garden, Radio City Music Hall, the Beacon Theatre in New York, and The Chicago Theatre. The company makes money by booking these venues with a constant stream of events, from concerts by major artists to family shows and special performances. Revenue (the total money coming in) is generated from ticket sales, venue rentals, food and beverage sales, and merchandise sold at these events.
Productions
A smaller but very important part of the business is the company's own productions, most notably the 'Christmas Spectacular Starring the Radio City Rockettes'. Unlike simply hosting other people's shows, here the company owns the entire production, from the performers to the music and story. This has been a holiday tradition at Radio City Music Hall for many decades, drawing huge crowds and contributing significantly to the company's revenue each year. This gives the company a unique and recurring source of income that it directly controls.
What management is betting on now
The company's current strategy is focused on maximizing the use of its famous venues and expanding its high-end hospitality offerings. Management is working to keep a full calendar of events, attracting top performers and a wide variety of shows to its stages. They are also looking to grow revenue from premium experiences, such as luxury suites and exclusive clubs within the venues, which cater to corporate clients and guests looking for a more upscale experience. The goal is to increase profitability from each event and strengthen relationships with sponsors and corporate partners.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$271.09M
Net income
$-9.98M
Diluted EPS
-0.21
Operating cash flow
$-16.62M
Free cash flow
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Sources
Revenue
$246.26M
Net income
$5.11M
Diluted EPS
0.11
Operating cash flow
$183.86M
Free cash flow
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Sources
Revenue
$459.94M
Net income
$92.72M
Diluted EPS
1.94
Operating cash flow
$164.39M
Free cash flow
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Sources
Revenue
$158.26M
Net income
$-21.65M
Diluted EPS
-0.46
Operating cash flow
$19.81M
Free cash flow
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Sources
Revenue
$154.14M
Net income
$-27.18M
Diluted EPS
-0.56
Operating cash flow
$-27.01M
Free cash flow
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Sources
Revenue
$242.47M
Net income
$8.04M
Diluted EPS
0.17
Operating cash flow
$56.81M
Free cash flow
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Sources
Revenue
$407.42M
Net income
$75.89M
Diluted EPS
1.56
Operating cash flow
$112.86M
Free cash flow
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Sources
Revenue
$138.71M
Net income
$-19.32M
Diluted EPS
-0.40
Operating cash flow
$-27.36M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $193.48 vs current price $75.75
Wall Street consensus is the average analyst price target: $91.62 (-52.6% lower than our fair-value estimate).
Our most-likely fair value is $193.48 a share — about 155.4% above today's price of $75.75, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $881.8M. Interest coverage 4.2x.
Net debt
$881.77M
Interest coverage
4.24x
Madison Square Garden Entertainment Corp.'s profit covers its interest bill about 4.2 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
MSGE
BASELINE
Madison Square Garden Entertainment Corp.
Total debt $1.18B Interest coverage 4.24x This is the baseline the peer rows are being compared against.
Total debt $913.31M Interest coverage -2.10x -100% vs MSGE This peer has almost no interest-payment cushion compared with MSGE.
Total debt $11.28B Interest coverage 3.90x -8% vs MSGE Has roughly the same debt cushion as MSGE.
Total debt $5.16B Interest coverage 2.43x -43% vs MSGE Carries about 1.7x less debt cushion than MSGE.
Total debt $6.77M Interest coverage -7.74x -100% vs MSGE This peer has almost no interest-payment cushion compared with MSGE.
What you should know
The case for and against MSGE
3 Rewards
3 Risks
Rewards
-
Revenue grew 12.5% last year.
-
Returns 407.5% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 51.5% above its 5-year average P/E.
-
Operating margin compressed from 13.5% to -4.7% over 3 years.
-
Net debt grew 6.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
54.89x
Forward P/E
26.08x
P/B
78.25x
P/S
3.38x
EV/EBITDA
19.97x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
47.3%
Operating margin
-4.7%
Net margin
6.2%
ROE
407.5%
ROA
5.8%
Health
Liquidity and balance-sheet strength
Debt / equity
25.67x
Current ratio
0.70x
Quick ratio
0.56x
Total debt
$1.18B
Total cash
$293.60M
Growth
How the business has been compounding
Revenue TTM
$1.14B
Revenue 5Y CAGR
12.9%
EPS TTM
1.38
EPS 5Y CAGR
-2.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$351.44M
Free CF TTM
$323.09M
FCF margin
28.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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