Investment Thesis
Lionsgate is in severe financial distress with negative stockholders equity (-$1.3B), indicating technical insolvency. The company is burning cash at an unsustainable rate (-$253.6M FCF annually), coupled with persistent unprofitability (-15.6% net margin) and critically low liquidity (0.46x current ratio). Without immediate restructuring or dramatic operational turnaround, the company faces elevated default risk.
Strengths
- Revenue growth of 7% YoY demonstrates some market demand for content
- Operating cash burn slightly improved in net income terms (+2.7% YoY)
- Maintains $182.4M in cash providing short-term operational runway
Risks
- Negative stockholders equity of -$1.3B indicates accounting insolvency
- Operating cash flow negative at -$243.9M; company burning cash from core operations
- Current ratio of 0.46x signals severe liquidity crisis; liabilities exceed short-term assets
- Interest coverage ratio of -0.1x shows inability to service debt from operating income
- Burn rate of -$253.6M FCF annually would exhaust cash reserves within 9 months at current trajectory
- Long-term debt of $1.9B unsustainable given negative operating cash flows
Key Metrics to Watch
- Operating cash flow trajectory and path to positive FCF
- Quarterly progress toward operating profitability
- Liquidity position and cash runway given burn rate
- Debt restructuring discussions or covenant compliance status
Financial Metrics
Revenue
1.7B
Net Income
-268.5M
EPS (Diluted)
$-0.95
Free Cash Flow
-253.6M
Total Assets
5.2B
Cash
182.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-1.2%
Net Margin
-15.6%
ROE
N/A
ROA
-5.1%
FCF Margin
-14.7%
Balance Sheet & Liquidity
Current Ratio
0.46x
Quick Ratio
0.46x
Debt/Equity
N/A
Debt/Assets
121.6%
Interest Coverage
-0.10x
Long-term Debt
1.9B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-12T15:39:18.906480 |
Data as of: 2025-12-31 |
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