How High Can Lions Gate Soar?
Tomorrow, Lions Gate Entertainment will release its latest quarterly results. With the stock having set new all-time highs throughout the past year, investors are hoping that the good times will continue for quite a while longer.
Lions Gate first got the attention of many investors when it entered into a production agreement for movies based on the popular Hunger Games trilogy. With the first of four planned installments having been a blockbuster when it was released in March 2012, Lions Gate hopes that the planned release of the second movie this November will prove equally lucrative for the company. Let's take an early look at what's been happening with Lions Gate over the past quarter and what we're likely to see in its quarterly report.
Stats on Lions Gate
Analyst EPS Estimate
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
What's playing for Lions Gate's earnings this quarter?
Analysts have had mixed views about Lions Gate's earnings in recent months, boosting their March-quarter estimates by $0.02 per share but cutting a penny from their consensus earnings per share for the fiscal 2014 year. The shares, meanwhile, have continued to soar, rising 40% just since late February.
Lions Gate has more going for it than just the Hunger Games movies. It produces both movies and television productions, with a stable of television series including the popular Mad Men and Anger Management. The company also owns a 50% stake in the TV Guide cable channel and website, with a new agreement in March with CBS in which Lions Gate gave up its former majority control of the TV Guide joint venture. Both companies expect to push TV Guide in new directions to try to boost its appeal and revenue-generating capacity.
One interesting area in which Lions Gate could see further gains is in producing entertainment for content-delivery companies. The company produces the new prison drama/comedy Orange Is the New Black for Netflix , which has taken large steps lately to try to boost its own proprietary content. Under the deal, Lions Gate earns a profit for producing the show, while Netflix retains exclusive rights to draw more subscribers to its streaming service.
Still, Hunger Games remains the big focus. Although neither Netflix nor Amazon.com has been heavily promoting the first movie as a streaming option on their respective services, it's possible that now that they have the movie available, they'll make more of a push as the November release date for Catching Fire approaches.
In Lions Gate's quarterly report, be sure to look past Hunger Games-related news to see how the rest of the company is doing. Long-term investors need to think about how the company will survive several years down the road when the blockbuster series has run its course, and paying attention to that now should help you avoid any unpleasant surprises lately.
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The article How High Can Lions Gate Soar? originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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