It's been a good week for Starz Entertainment Corp. (NASDAQ:STRZ) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.6% to US$22.09. Revenues of US$322m were in line with expectations, although statutory losses per share were US$2.02, some 17% smaller than was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, Starz Entertainment's ten analysts currently expect revenues in 2027 to be US$1.25b, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 69% to US$5.22. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$1.27b and losses of US$3.39 per share in 2027. So it's pretty clear the analysts have mixed opinions on Starz Entertainment even after this update; although they reconfirmed their revenue numbers, it came at the cost of a regrettable increase in per-share losses.
Check out our latest analysis for Starz Entertainment
As a result, there was no major change to the consensus price target of US$35.00, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Starz Entertainment analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$26.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2027. That would be a definite improvement, given that the past year have seen revenue shrink 5.0% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 8.4% per year. So it's pretty clear that, although revenues are improving, Starz Entertainment is still expected to grow slower than the industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Starz Entertainment. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Starz Entertainment going out to 2028, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for Starz Entertainment you should be aware of.
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