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Starz Entertainment Corp
(NASDAQ:STRZ)
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Rating:45Neutral
Price Target:
$23.50
▼(-3.77% Downside)
Action:Reiterated
Date:08/11/26
The score is held down primarily by weak financial performance (sharp TTM revenue contraction, ongoing losses, and a return to negative TTM free cash flow) and only modest/negative technical momentum (below 20D/50D with negative MACD). These are partially offset by a constructive earnings call with raised guidance, improving OTT/ARPU trends, upgraded free-cash-flow outlook, and a stated deleveraging path, while valuation remains difficult to support given the negative P/E and no stated dividend yield.
Positive Factors
High gross and EBITDA margins
Starz's content economics show outsized gross and EBITDA margins, indicating that once scale is restored incremental revenue can drop to the bottom line. Durable margin strength supports long-term cash generation if content spend remains disciplined and OTT scale rises.
Negative Factors
Severe revenue decline and losses
A dramatic TTM revenue contraction and ongoing net losses point to a fragile top‑line base and weak earnings stability. Even with strong margins, a much smaller revenue footprint raises execution and scaling risk and makes durable profitability contingent on sustained OTT recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
High gross and EBITDA margins
Starz's content economics show outsized gross and EBITDA margins, indicating that once scale is restored incremental revenue can drop to the bottom line. Durable margin strength supports long-term cash generation if content spend remains disciplined and OTT scale rises.
Read all positive factors
Starz Entertainment Corp (STRZ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$445.23M
Dividend YieldN/A
Average Volume (3M)166.64K
Price to Earnings (P/E)―
Beta (1Y)0.87
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees517
SectorGeneral
Sector StrengthN/A
IndustryEntertainment
Share Statistics
EPS (TTM)-25.48
Shares Outstanding17,124,170
10 Day Avg. Volume142,113
30 Day Avg. Volume166,639
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)0.40
Price to Sales (P/S)0.63
P/FCF Ratio2.41
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$32.29Price Target Upside32.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)-23.17
Revenue Forecast (FY)$1.26B
Starz Entertainment Corp Business Overview & Revenue Model
Company Description
Starz Entertainment Corp. offers its premium, subscription-based video content to viewers throughout the United States and Canada. The company primarily focuses on delivering its STARZ-branded services, which are accessible directly to consumers v...
Starz Entertainment Corp Earnings Call Summary
Earnings Call Date:Aug 07, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a constructive and improving operational and financial trajectory: content performance and engagement were strong (notably Fightland and Raising Kanan), OTT revenue returned to year-over-year growth, adjusted OIBDA beat expectations and guidance was raised, free cash flow outlook was upgraded, and management outlined a clear deleveraging path and distribution expansion (Peacock, Crunchyroll). Near-term pressures include a large one-time $147 million restructuring charge, Q2 free cash flow volatility driven by content timing, Q3 seasonality in adjusted OIBDA due to amortization, and continued secular weakness in linear revenue. On balance, the positive operational momentum, improved guidance, deleveraging progress, and distribution wins outweigh the near-term accounting charges and seasonality risks.Positive Updates
Revenue and OTT Recovery
Total revenue of $308 million in Q2; OTT revenue of $221 million, marking the first year-over-year OTT revenue growth since Q4 2024. On a pro forma basis (excluding $3 million of prior-year Canadian OTT revenue), OTT revenue would have increased 1.4% year-over-year.
Negative Updates
Restructuring Charge Related to Universal Pay-2 Exit
Recorded a $147 million restructuring charge in Q2 tied to the exit of the Universal Pay-2 agreement (agreement signed April 2026); while management expects this to be the final charge of this magnitude, it materially impacted quarter accounting.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and OTT Recovery
Total revenue of $308 million in Q2; OTT revenue of $221 million, marking the first year-over-year OTT revenue growth since Q4 2024. On a pro forma basis (excluding $3 million of prior-year Canadian OTT revenue), OTT revenue would have increased 1.4% year-over-year.
Read all positive updates
Company Guidance
Management raised 2026 financial guidance and reiterated longer‑term targets: Q2 adjusted OIBDA was $60M and they now expect 2026 adjusted OIBDA growth to be mid‑single digits (Q3 adj. OIBDA mid‑$30M; Q4 mid‑$60M), with a 20% adjusted OIBDA margin target in the back half of 2027; unlevered free cash flow (FCF) was -$15M in Q2 and +$66M YTD and the company raised its 2026 unlevered FCF outlook to the mid‑to‑upper end of the prior $80M–$120M range (conversion target of adj. OIBDA to unlevered FCF ~70%); equity FCF was -$33M in Q2 and +$35M YTD and management expects material FCF acceleration toward 2029 (equity FCF >70% and unlevered FCF >90% as Universal payments end); cash content spend was $182M in Q2 with full‑year cash content spend now expected below $600M; total Q2 revenue was $308M and OTT revenue $221M (OTT returned to year‑over‑year growth and would be +1.4% pro forma excluding $3M Canada), ARPU is improving post‑April price increase and should expand further in H2; balance sheet metrics: net debt $566M and adj. OIBDA leverage 2.9x at 6/30/26, with expected year‑end leverage of ~2.7x even after a $67M term‑loan increase and a path to ~2.5x, and a ~$4M annual cash interest savings from refinancing; CapEx remains <$20M and near‑term tax drag is limited by NOLs.Starz Entertainment Corp Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
41
Neutral
Cash Flow
34
Negative
| Breakdown | TTM | Mar 2026 | Dec 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.26B | 306.90M | 1.37B | 1.39B | 3.85B | 3.60B |
| Gross Profit | 872.40M | 306.90M | 667.60M | 537.90M | 1.35B | 1.31B |
| EBITDA | 368.10M | -154.20M | 638.20M | -98.00M | 141.20M | 1.73B |
| Net Income | -427.60M | -164.90M | -211.20M | -915.20M | -2.01B | -188.20M |
Balance Sheet | ||||||
| Total Assets | 1.67B | 1.79B | 2.17B | 7.09B | 7.43B | 8.99B |
| Cash, Cash Equivalents and Short-Term Investments | 59.60M | 102.10M | 17.80M | 357.70M | 300.00M | 384.60M |
| Total Debt | 669.60M | 614.30M | 1.09B | 3.46B | 4.25B | 4.31B |
| Total Liabilities | 1.38B | 1.31B | 1.41B | 7.28B | 6.30B | 5.99B |
| Stockholders Equity | 295.90M | 478.70M | 766.40M | -312.70M | 784.50M | 2.68B |
Cash Flow | ||||||
| Free Cash Flow | -21.98M | 80.20M | -63.60M | -152.20M | -472.60M | -920.30M |
| Operating Cash Flow | -2.73M | 98.90M | -46.00M | -131.80M | -438.30M | -725.80M |
| Investing Cash Flow | -17.53M | 66.80M | -99.20M | -24.80M | -42.50M | -80.50M |
| Financing Cash Flow | 28.08M | -66.80M | 126.00M | 132.00M | 428.10M | 664.30M |
Starz Entertainment Corp Technical Analysis
Negative
24.42
Price Trends
10.60
Negative
11.02
Negative
Market Momentum
-0.43
Negative
39.68
Neutral
51.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRZ, the sentiment is Negative. The current price of 24.42 is above the 20-day moving average (MA) of 9.41, above the 50-day MA of 10.60, and equal to the 200-day MA of ―, indicating a neutral trend. The MACD of -0.43 indicates Negative momentum. The RSI at 39.68 is Neutral, neither overbought nor oversold. The STOCH value of 51.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STRZ.
Starz Entertainment Corp Risk Analysis
Starz Entertainment Corp disclosed 34 risk factors in its most recent earnings report. Starz Entertainment Corp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Starz Entertainment Corp Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $325.45B | 24.20 | 47.96% | ― | 17.62% | 34.80% | |
71 Outperform | $184.50B | 21.99 | 7.87% | 1.58% | 5.31% | -23.96% | |
60 Neutral | $509.85M | -26.30 | -2.03% | ― | -4.59% | 87.95% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
54 Neutral | $70.27B | -22.04 | -9.22% | ― | -5.87% | -512.89% | |
50 Neutral | $11.38B | -18.11 | -5.27% | 2.44% | 1.23% | -2381.06% | |
45 Neutral | $445.23M | -1.02 | -82.08% | ― | ― | ― |
* General Sector Average
STRZ
Starz Entertainment Corp
26.00
13.43
106.84%
AMCX
AMC Networks
12.36
5.41
77.84%
PSKY
Paramount Skydance
10.14
-3.14
-23.64%
DIS
Walt Disney
106.85
-8.04
-6.99%
NFLX
Netflix
78.16
-46.35
-37.22%
WBD
Warner Bros
27.99
16.17
136.80%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.