One-glance verdict
Within fair range
$151.91 our estimate vs market $103.53
Wall Street consensus: $165.46 (8.9% higher than our fair-value estimate)
32% below our estimate
Fundamentals snapshot
Sphere Entertainment Co.
SPHR · NYQ · Communication Services · Entertainment
Current price
$103.53
52-week range
$59.14 - $181.63
Market cap
$3.72B
Balance sheet
Distressed
-2.10x Concerning
Net debt $362.33M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 11.2% last year.
- Reward Free cash flow was positive in 1/10 years.
- Risk Net debt grew 33.8% over 3 years.
- Risk Insider ownership is only 6.7% (peer median: 17.9%).
What this company does
Sphere Entertainment Co.
Sphere Entertainment Co. is a company that puts on live shows and events, primarily at its unique Sphere venue which uses special technology for immersive experiences. Their money comes from tickets, sponsorships, and their own sports TV channels, all of which contribute to their overall financial health. Understanding where their income streams originate helps us see how well they are doing at attracting audiences and viewers.
How the company got here
Sphere Entertainment Co. wasn't always called that. It used to be known as Madison Square Garden Entertainment Corp., a name many people associate with the famous New York City arena. The company officially changed its name in April 2023 to reflect its focus on a new, cutting-edge entertainment venue. Founded in 2006 and based in New York, the company has evolved from its roots in traditional sports and entertainment venues to embrace new technological frontiers in live experiences.
What it actually does
Sphere Entertainment Co. is all about creating and delivering live entertainment experiences. Think of it as a company that puts on shows and events, but with a big emphasis on using advanced technology to make them more immersive. They operate in the United States, aiming to captivate audiences with unique and memorable events. The company is structured around two main ways it makes money: its groundbreaking Sphere venue and its regional sports networks.
Sphere
This is the company's flagship, a massive, technologically advanced venue designed to offer unparalleled multi-sensory experiences. Imagine attending an event where not only can you see and hear, but you can also feel the environment around you, thanks to cutting-edge visual and haptic technologies. This segment is focused on creating and hosting unique entertainment content, from concerts by major artists to immersive cinematic events, all within this futuristic dome. It's a significant investment and a key part of the company's future.
MSG Networks
This part of Sphere Entertainment Co. is like a traditional media company, but focused on sports and entertainment. It includes regional sports and entertainment television networks that broadcast live local games and other programming. They also offer streaming services, allowing fans to watch content directly or through their cable subscriptions. This segment provides a more consistent revenue stream, often from advertising and subscription fees, complementing the more event-driven nature of the Sphere.
What management is betting on now
Management's primary focus is on maximizing the potential of the Sphere venue. They are investing heavily in developing and showcasing unique, technology-driven entertainment content that can only be experienced there. The goal is to establish the Sphere as a premier global destination for live entertainment, attracting top artists and creating unforgettable events. Simultaneously, they aim to continue growing and optimizing their MSG Networks business, ensuring a stable financial foundation while pursuing innovation in live experiences.
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
$313.64M
Net income
$-38.33M
Diluted EPS
-1.07
Operating cash flow
$-33.66M
Free cash flow
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Sources
Revenue
$386.41M
Net income
$4.46M
Diluted EPS
-0.04
Operating cash flow
$136.24M
Free cash flow
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Sources
Revenue
$394.28M
Net income
$64.74M
Diluted EPS
2.42
Operating cash flow
$180.22M
Free cash flow
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Sources
Revenue
$262.51M
Net income
$-101.20M
Diluted EPS
-2.80
Operating cash flow
$115.84M
Free cash flow
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Sources
Revenue
$282.68M
Net income
$151.82M
Diluted EPS
3.39
Operating cash flow
$-59.06M
Free cash flow
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Sources
Revenue
$280.57M
Net income
$-81.95M
Diluted EPS
-2.27
Operating cash flow
$6.35M
Free cash flow
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Sources
Revenue
$308.29M
Net income
$-125.95M
Diluted EPS
-3.50
Operating cash flow
$6.73M
Free cash flow
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Sources
Revenue
$227.91M
Net income
$-105.28M
Diluted EPS
-2.95
Operating cash flow
$34.09M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $151.91 vs current price $103.53
Wall Street consensus is the average analyst price target: $165.46 (8.9% higher than our fair-value estimate).
Our most-likely fair value is $151.91 a share — about 46.7% away from today's price of $103.53, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $362.3M. Interest coverage -2.1x.
Net debt
$362.33M
Interest coverage
-2.10x
Sphere Entertainment Co.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
SPHR
BASELINE
Sphere Entertainment Co.
Total debt $913.31M Interest coverage -2.10x This is the baseline the peer rows are being compared against.
Total debt $11.28B Interest coverage 3.90x This peer still has a real interest-payment cushion, while SPHR does not.
Total debt $1.18B Interest coverage 4.24x This peer still has a real interest-payment cushion, while SPHR does not.
Total debt $282.64M Interest coverage 12.73x This peer still has a real interest-payment cushion, while SPHR does not.
Total debt $4.95B Interest coverage 4.12x This peer still has a real interest-payment cushion, while SPHR does not.
Total debt $5.16B Interest coverage 2.43x This peer still has a real interest-payment cushion, while SPHR does not.
What you should know
The case for and against SPHR
2 Rewards
3 Risks
Rewards
-
Revenue grew 11.2% last year.
-
Free cash flow was positive in 1/10 years.
Risks
-
Net debt grew 33.8% over 3 years.
-
Insider ownership is only 6.7% (peer median: 17.9%).
-
Return on equity was -3.1% last year — the company lost money on shareholders' equity.
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)
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Forward P/E
-36.50x
P/B
1.67x
P/S
2.74x
EV/EBITDA
16.04x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
54.7%
Operating margin
-19.5%
Net margin
-5.7%
ROE
-3.1%
ROA
-1.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.41x
Current ratio
1.22x
Quick ratio
1.12x
Total debt
$913.31M
Total cash
$550.97M
Growth
How the business has been compounding
Revenue TTM
$1.36B
Revenue 5Y CAGR
66.0%
EPS TTM
-2.69
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$398.64M
Free CF TTM
$191.00M
FCF margin
14.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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