Lions Gate Entertainment (LGF.A) Top Q4 Earnings and Revenue Estimates

Lions Gate Entertainment (LGF.A) posted quarterly earnings of $0.21 per share, beating the Zacks’ consensus estimate of $0.01 per share. That compares with earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a 2,000% revenue surprise. A quarter ago, this movie producer and distributor was expected to report a loss of $0.02 per share, when it actually generated a profit of $0.26, delivering a surprise of 1,400%.

Over the past four quarters, the company has exceeded consensus EPS estimates three times.

Lions Gate, which belongs to the Zacks Film & Television Production & Distribution industry, reported revenue of $1.09 billion for the quarter ending March 2023, beating the Zacks’ consensus estimate by 11.37%. That compares with revenue of $929.9 million a year ago. The company has beaten consensus revenue estimates three times in the past four quarters.

The sustainability of immediate stock price movement based on recently released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

Shares of Lions Gate have added about 82.5% since the start of the year, compared to the S&P 500’s gain of 7.2%.

What’s next for Lions Gate?

While Lions Gate has outperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is a company’s earnings outlook. This includes not only current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.

Empirical research shows a strong relationship between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a tried and tested rating tool like Zacks Rank, which has an impressive track record of capturing the strength of earnings estimate revisions.

Ahead of this earnings release, Lions Gate’s forecast revision trend: mixed. While the extent and direction of forecast revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So the stock is expected to perform in line with the market in the near term. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the forecasts for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $-0.07 on revenue of $1.02 billion for the next quarter and $0.42 on revenue of $4.19 billion for the current fiscal year.

Investors should be aware that the outlook for the industry can have a significant impact on stock performance as well. In terms of Zacks Industry Rank, Film & Television Production & Distribution is currently in the bottom 22% of the Zacks 250-plus industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2-to-1.

Another stock in the broader Zacks Consumer Discretionary sector, Lululemon (LULU), has yet to report results for the quarter ending April 2023. Results are expected to be released on June 1.

This sportswear maker is expected to post quarterly earnings of $1.97 per share in its upcoming report, representing a year-over-year change of +33.1%. The consensus EPS estimate for the quarter has been revised 1.7% higher over the past 30 days to the current level.

Lululemon’s revenue is expected to be $1.92 billion, up 19.3% from the prior quarter.

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