Investment Thesis
Starz faces severe financial distress with operating losses of $152.8M on $306.9M revenue (-49.8% margin) and critical liquidity crisis indicated by 0.31x current ratio. High debt burden of $614.3M cannot be serviced from operations (negative -0.7x interest coverage), and negative ROE/ROA indicate shareholder value destruction. While positive FCF provides temporary relief, the fundamental unprofitability signals existential restructuring risks.
Strengths
- Positive operating cash flow of $73.2M and free cash flow of $68.7M provide near-term liquidity buffer
- Substantial $306.9M revenue base from established media content business
- $1.8B asset base provides restructuring value and debt recovery potential
Risks
- Critical liquidity crisis with 0.31x current ratio indicating imminent working capital stress and potential covenant violations
- Massive operating losses of -$152.8M and negative interest coverage of -0.7x signal inability to service $614.3M debt from operations
- Negative ROE of -34.4% and ROA of -9.2% demonstrate persistent shareholder value destruction
- High leverage at 1.28x Debt/Equity with unsustainable debt structure relative to unprofitable operations
- Positive FCF masking operational deterioration - non-cash charges and working capital management may not be sustainable
Key Metrics to Watch
- Quarterly operating income trend and path to EBITDA break-even
- Cash position and working capital changes - any further liquidity deterioration is critical
- Debt refinancing capability and covenant compliance given negative interest coverage
Financial Metrics
Revenue
306.9M
Net Income
-164.9M
EPS (Diluted)
$-9.83
Free Cash Flow
68.7M
Total Assets
1.8B
Cash
102.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-49.8%
Net Margin
-53.7%
ROE
-34.4%
ROA
-9.2%
FCF Margin
22.4%
Balance Sheet & Liquidity
Current Ratio
0.31x
Quick Ratio
0.31x
Debt/Equity
1.28x
Debt/Assets
73.2%
Interest Coverage
-0.72x
Long-term Debt
614.3M
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: 2026-05-09T13:16:43.220427 |
Data as of: 2026-03-31 |
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