Rise in Starz Entertainment's Shares on Current Day
In the wake of its spin-off from Lionsgate Studios, Starz Entertainment has displayed a mix of positive and challenging trends as shown in its Q4 2025 results.
The company's stock price surged 24.2% higher by 10:30 a.m. ET on Friday, reaching a notable high. However, by 90 minutes later, the stock had backed down to a 20% gain. Starz shares are currently trading at 1.2 times trailing sales and 8 times OIBDA, suggesting they don't appear overly expensive.
Starz Entertainment reported annual revenue of approximately $2.75 billion for the fiscal year ending March 31, 2025. While the company's adjusted operating income before depreciation and amortization (OIBDA) more than doubled from $45.5 million to $93.3 million, it experienced significant impairment charges totaling approximately $457 million related to restructuring and asset write-downs. These charges negatively impacted its net income from continuing operations.
The company noted changes in consumer behavior and competition from emerging technologies and free content platforms as ongoing challenges to subscriber growth and retention. The Starz Network service had 19.6 million North American subscribers at the end of the reporting period, with 12.3 million subscribers to its digital streaming channel.
Analysts suggest Starz remains a “hold” investment until it achieves greater scale or subscriber mass, implying that the company is still in a growth and adjustment phase post-separation from Lionsgate. The earnings report showed a more efficient operation overall, with soaring OIBDA profits but lower sales.
It is unclear whether the soaring OIBDA profits and lower sales are a one-time effect of the Lionsgate spinoff or a sustainable long-term business advantage. Starz collected $201.5 million in adjusted OIBDA for the full fiscal year, and the company will align its fiscal year with the calendar year from now on. Earnings figures will be included in the next report, which will reflect the second quarter of fiscal year 2025.
Starz Entertainment's strategic outlook will be closely watched as the company navigates its independent path. Lionsgate Studios' stock is identified as LION 1.38%.
In light of the analysts' suggestions, Starz Entertainment might need to achieve greater scale or subscriber mass to be considered a strong investment, as it remains in a growth and adjustment phase post-separation from Lionsgate. The company's investments in finance could benefit from increased revenue and market positioning to ensure a sustainable financial future.
