Starz Entertainment Corp. (STRZ) Market Cap
Starz Entertainment Corp. has a market capitalization of $337.1M.
Financials based on reported quarter end 2025-12-31
Price: $20.09
▲ 2.89 (16.80%)
Market Cap: 337.14M
NASDAQ · time unavailable
CEO: Jeffrey A. Hirsch
Sector: Communication Services
Industry: Entertainment
IPO Date: 2025-05-07
Website: https://mediaroom.starz.com
Starz Entertainment Corp. (STRZ) - Company Information
Market Cap: 337.14M · Sector: Communication Services
Starz Entertainment Corp. provides subscription video programming to consumers in the United States and Canada. Its business consists of the distribution of STARZ-branded premium subscription video services through over-the-top platforms and distributors on a direct to-consumer basis through the STARZ-branded app and through multichannel video programming distributors. The company is based in Vancouver, Canada.
Analyst Sentiment
Based on 8 ratings
Analyst 1Y Forecast: $19.00
Average target (based on 1 sources)
Consensus Price Target
Low
$13
Median
$17
High
$30
Average
$19
Downside: -5.4%
Price & Moving Averages
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Fundamentals Overview
📊 AI Financial Analysis
Powered by StockMarketInfo"STRZ reported revenue of $322.8M for the year ending December 31, 2025. Despite this positive revenue figure, the company has faced challenges with a net income loss of $20.7M and a negative operating cash flow of $21.4M. The balance sheet shows total assets of $1.913B against total liabilities of $1.267B, resulting in total equity of $646M. Additionally, the company carries a net debt of $577.6M, indicating a leveraged position. STRZ has not paid dividends, and with a current price of $11.73, the stock has experienced a modest one-year price change of 4.73%. The stock performance has been volatile, showing a significant six-month decline of nearly 20%. STRZ is currently in a loss-making situation, which raises concerns about profitability and cash flow stability, despite the growth seen in revenue. The analyst consensus price target for the stock ranges from $13 to $30, indicating potential upside amidst the SP trends."
Revenue Growth
Revenue of $322.8M demonstrates growth potential.
Profitability
Negative net income and significant operating losses.
Cash Flow Quality
Negative free cash flow and operating cash flow raise concerns.
Leverage & Balance Sheet
Total debt is significant, but equity position is manageable.
Shareholder Returns
Limited returns due to lack of dividends and low price appreciation.
Analyst Sentiment & Valuation
Mixed sentiment reflected in varying price targets.
Disclaimer:This analysis is AI-generated for informational purposes only. Accuracy is not guaranteed and this does not constitute financial advice.
Management sounded upbeat in prepared remarks—pointing to all-time-high 12.7m OTT subs (+7.6% YoY; +370k in Q4), FY25 adjusted OIBDA of $204m (+2% vs $200m outlook), and leverage at 2.9x (better than 3.1x). However, the Q&A reveals the real operational hurdle: 2026 depends on smoothing the legacy studio-to-standalone cash/content timing issues. They explicitly discuss getting spend/cash “into better alignment,” expecting more consistent first-3-quarter cadence and content spend under ~$650m. On capital allocation, they’re cautious: no clear shareholder returns until leverage gets nearer 2.5x, and any M&A must stay within that leverage discipline (avoiding “4x, 5x, 6x” deals). Analyst pressure focused on subscriber retention and distribution/bundling—management leaned on longer-term offers (churn reduction over 12–18 months) and bundling-driven TAM/revenue accretion, plus Sky co-commission for Fightland to improve unit economics.
Growth Catalysts
- Spartacus premiere in Dec quarter (noted as 'to critical acclaim')
- Power Book IV: Force Season 3 in-season viewership growth of 57%
- De-risked/franchise pipeline driving 2026 slate momentum (Outlander finale; Power Book III: Raising Kanan; Fightland; Blood of My Blood; P-Valley)
Business Development
- Sky added as co-commission partner for Fightland (improving unit economics for owned series)
- Lionsgate as Pay-One movies partner (e.g., The Housemaid; Michael biopic) and international sales partner for Fightland (via Content London event)
- Plan B hired as production agency for 4 announced originals (e.g., Kingmaker, Masquerade, The Rooms; materials being readied; cost/cost-of-production being finalized)
- Bundling/distribution partnerships expansion focus; complementary/add-on posture to broad-based and targeted streamers
Financial Highlights
- U.S. OTT subscribers: +370,000 in Q4 to 12.7 million all-time high; total OTT +7.6% YoY
- Total U.S. subscribers: +170,000 in quarter to 17.6 million (OTT growth offset by linear decline)
- Total revenue (Q4): $323 million; +60 bps sequentially
- Adjusted OIBDA (Q4): $56 million; up over 100% sequentially (cited: lower programming amortization, lower advertising & marketing, higher revenue)
- FY 2025 adjusted OIBDA: $204 million vs $200 million outlook (+2%)
- Leverage: ended 2025 at 2.9x vs 3.1x guide
- 2026 unlevered free cash flow guidance: $80 million to $120 million (improvement of roughly $80m to $120m YoY); expecting positive equity free cash flow
- 2026 adjusted OIBDA growth: low single-digit % vs 2025
- 2026 leverage exit: ~2.7x (improvement from ~2.9x current); still targeting 2.5x as quickly as possible
- Revenue cadence note for 2026: Q4 more positive; first 3 quarters expected to be consistent/not choppy
- Content spend guidance: content spend coming in under about $650 million next year (as part of improved cash alignment vs 2025)
Capital Funding
- Net debt (end of Q4): $589 million (roughly flat with Q3)
- Gross debt: $625 million (includes $325 million 5.5% senior unsecured notes and $300 million Term Loan A)
- Cash: $36 million
- Revolver: $150 million undrawn
- Production loans: $41 million in production loans identified; stated to be 'just for Fightland' (Scott); expected to grow as new originals greenlit and remain fairly consistent after 2026 as loans are repaid
Strategy & Ops
- Decision to stop disclosing subscribers beginning with March 2026 quarter (de-emphasize quarterly subscriber management in favor of longer-term North Star)
- Canadian business restructured to licensing revenue stream (Q4 sequential revenue growth partly from distribution revenue tied to this transition)
- Fightland production: first wholly owned series; co-commission with Sky announced 'this morning'
- Content slate aging/de-aging underway; margin plan tied to increased ownership and de-aged slate contributing to incremental international monetization
- Longer-term offers/annual offers: take rate on transition from 12-month offer to retail 'significantly higher'; designed to push churn down over 12–18 months
- Automation/AI use: AI used to reduce costs for large scenes in Spartacus; AI used for internal training and efficiency across data-heavy D2C operations (not quantified)
Market Outlook
- 2026 OTT revenue expected to grow (no numeric figure given)
- 2026 adjusted OIBDA growth: low single-digit % vs 2025
- 2026 unlevered FCF: $80m-$120m
- 2026 exit leverage: ~2.7x
- 2026 function as an 'inflection point' for cash flow generation (management framing)
Risks & Headwinds
- Ongoing linear declines: linear and OTT revenue decline in Q4 attributed to 'ongoing traditional linear declines' (plus holiday seasonal promotions and lower-churn multi-month plans)
- Choppiness/cadence risk: management acknowledged past volatility driven by legacy studio transition and cash/content payment timing; mitigation described via alignment work into 2026
- M&A leverage constraint: management explicitly wants to avoid deals at 4x–6x levered; prefers operating near 2.5x target (caps strategic risk to capital allocation flexibility)
- International reliance variability: management expects international appetite but not quantified; ramp linked to slate ownership and increased library control
- AI/creative differentiation risk addressed indirectly: management believes creative success of originals is 'hard to replicate' (risk that AI alone won’t substitute for unique programming)
Sentiment: MIXED
Note: This summary was synthesized by AI from the STRZ Q4 2025 earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.