Content production and distribution company Sphere Entertainment (NYSE:SPHR) is set to report its earnings tomorrow before the market opens. Investors are eagerly awaiting the results to see how the company has performed in the past quarter.
Last quarter, Sphere Entertainment missed analysts‘ revenue expectations by 1%, reporting revenues of $321.3 million, which was up 98.3% year on year. It was a disappointing quarter for the company, with a miss on both revenue and earnings estimates. This has left investors wondering whether Sphere Entertainment is a buy or sell going into earnings.
Analysts are expecting Sphere Entertainment’s revenue to grow by 110% year on year to $271.4 million this quarter, a significant improvement from the 7.6% decrease recorded in the same quarter last year. The adjusted loss is expected to come in at -$0.85 per share. Despite the challenges faced in the previous quarter, the majority of analysts covering the company have reconfirmed their estimates over the last 30 days, indicating that they believe the business will remain stable heading into earnings.
To gain a better understanding of what to expect from Sphere Entertainment’s earnings, it is helpful to look at its peers in the leisure facilities segment. Some companies have already reported their Q2 results, providing insight into the industry trends. For example, Life Time saw year-on-year revenue growth of 18.9%, surpassing analysts‘ expectations by 5.2%. On the other hand, United Parks & Resorts reported flat revenue, in line with consensus estimates. Following their results, Life Time’s stock price rose by 7.5%, while United Parks & Resorts remained unchanged.
Inflation has been a key factor influencing the stock market performance, with progress towards the Fed’s 2% goal in 2023 leading to strong market performance. However, 2024 has been more volatile as the market reacts to mixed inflation data and uncertainty around rate cuts. Despite some leisure facilities stocks performing relatively well, the sector as a whole has seen a decline in share prices, with an average decrease of 6.4% over the last month. Sphere Entertainment is down 7.2% during the same period, with an average analyst price target of $42.7 compared to the current share price of $40.26.
As investors navigate the market fluctuations, it is essential to consider the long-term potential of companies in emerging sectors. With the rise of automation and generative AI, enterprise software stocks leveraging these technologies may become the Gorillas of the future. In this context, Sphere Entertainment’s focus on content production and distribution positions it well to capitalize on these trends.
In conclusion, Sphere Entertainment’s upcoming earnings report will provide valuable insights into the company’s performance and outlook. Investors should pay close attention to the revenue growth, adjusted loss, and analyst expectations to make informed decisions. As the market continues to evolve, staying informed and analyzing industry trends will be crucial for successful investment strategies.