Sphere Entertainment Co. (SPHR)
Valuation Overview•Is Sphere Entertainment Co. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Fragile underlying quality score of 36/100; weak margins or elevated debt leverage warrant caution.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street sentiment is generally neutral. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
SPHR demonstrates adequate business quality with stable profitability. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company is driving exceptional top-line expansion (19.0% 3Y CAGR) paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (-10.6%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $386.4M | — | +19.0% | -6.5% | -0.8% | |
| EBITDA | $95.1M | — | — | — | — | |
| Net Income | $4.5M | +0.0% | -1.1% | — | -10.0% | |
| EPS (Diluted) | $-0.04 | +0.0% | — | — | -6.2% | |
| Free Cash Flow | $131.4M | +0.0% | +22.5% | -15.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 48.3% | 36.2% | 43.1% | 39.4% |
| Operating Margin | -10.6% | -34.2% | -23.9% | -13.0% |
| Net Margin | 9.0% | 16.2% | -1.2% | -1.6% |
| FCF Margin | 25.2% | -79.4% | -85.3% | -43.1% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $-0.31 | $0.01 | +103.2% | ||
| Q1'26 | $-0.12 | $1.23 | +1125.0% | ||
| Q4'25 | $-1.62 | $-1.37 | +15.4% | ||
| Q3'25 | $-1.57 | $-2.71 | -72.6% | ||
| Q2'25 | $-2.48 | $-2.27 | +8.5% | ||
| Q1'25 | $-2.15 | $-3.49 | -62.3% | ||
| Q4'24 | $-2.76 | $-2.95 | -6.9% | ||
| Q3'24 | $-2.47 | $-2.00 | +19.0% |
Total return is +309.3% (1Y), outperforming the benchmark by +284.3%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +66.8% | +57.5% | — |
| 1Y | +309.3% | +284.3% | — |
| 3YCAGR | +78.2% | +56.8% | — |
| 5YCAGR | +32.1% | +18.5% | — |
| 10YCAGR | +14.4% | +0.4% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Sphere Entertainment Co. (SPHR) valuation, health, and returns.
Sphere Entertainment Co. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. overvalued (implying -55.5% downside from DCF intrinsic value of $70.03)
Sphere Entertainment Co. has multiple valuation anchors: DCF Intrinsic Value: $70.03 | Peer Relative Fair Value: $171.12 | Wall Street Analyst Target: $157.75 (implying +0.3% upside). A convergence of these signals offers higher conviction.
Sphere Entertainment Co. displays weak financial health with a composite quality score of 36/100, supported by a Altman Z-Score of 1.2 (distress zone), Piotroski F-Score of 1/9, Return on Invested Capital (ROIC) of -5.0%.
Sphere Entertainment Co. returns capital via buybacks instead of dividends, carrying a 0.6% buyback yield and reducing outstanding shares by +1.6% in the last 12 months.
Sphere Entertainment Co.'s current growth trajectory is Decelerating. The company achieved N/A 1Y revenue growth and +0.0% 1Y EPS growth, compared to its 3Y revenue CAGR of +19.0%.
Wall Street consensus is Buy based on 14 analysts, beating EPS expectations in 58% of recent quarters with a 3-quarter streak. The consensus price target represents a +0.3% change from current levels.
Investment risks for Sphere Entertainment Co. include: -17.7% 1-year max drawdown, high beta (1.42x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.42x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.