Investment Thesis
Lionsgate faces critical solvency challenges with negative stockholders' equity of -$1.2B, indicating liabilities exceed assets. The company cannot service its debt (0.4x interest coverage ratio) and has severe liquidity constraints (0.49x current ratio), while generating losses despite $2.6B in revenue and stagnant 1.8% growth.
Strengths
- Positive operating income of $97.1M demonstrates underlying business operations generate some profit
- Substantial revenue base of $2.6B provides scale and market presence
- Cash reserves of $341.5M provide near-term liquidity buffer
Risks
- Negative stockholders' equity of -$1.2B indicates technical insolvency with liabilities exceeding total assets
- Interest coverage ratio of 0.4x means operating income cannot cover interest expense, creating imminent default risk
- Severe liquidity crisis with current ratio of 0.49x, unable to meet short-term obligations without asset sales
- Net losses of -$198.3M despite revenue generation indicates unsustainable operational structure
- Anemic free cash flow of $11.4M (0.4% margin) insufficient to delever $1.9B long-term debt
- Stagnant revenue growth of 1.8% YoY provides no growth narrative to offset debt burden
Key Metrics to Watch
- Stockholders' equity trend toward positive territory (solvency recovery)
- Interest coverage ratio improvement above 1.0x (debt serviceability)
- Operating cash flow growth to support debt reduction
- Revenue growth acceleration above 5% YoY (return to growth)
- Current ratio improvement above 1.0x (liquidity adequacy)
- Debt reduction milestones and refinancing activity
Financial Metrics
Revenue
2.6B
Net Income
-198.3M
EPS (Diluted)
$-0.70
Free Cash Flow
11.4M
Total Assets
5.3B
Cash
341.5M
Profitability Ratios
Gross Margin
N/A
Operating Margin
3.7%
Net Margin
-7.5%
ROE
N/A
ROA
-3.7%
FCF Margin
0.4%
Balance Sheet & Liquidity
Current Ratio
0.49x
Quick Ratio
0.49x
Debt/Equity
N/A
Debt/Assets
119.7%
Interest Coverage
0.37x
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: 2026-05-28T07:37:22.097608 |
Data as of: 2026-03-31 |
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