Madison Square Garden Entertainment (MSGE) Reports Q1 Loss, Beats Revenue Estimates – November 9, 2022

Entertainment at Madison Square Garden (MSGE Free Report) came out with a quarterly loss of $1.19 per share versus the Zacks Consensus estimate of $0.95. That compares to a loss of $2.37 per share a year ago. These figures are adjusted for one-off effects.

This quarterly report represents an earnings surprise of -25.26%. A quarter ago, this company was expected to post a loss of $0.43 per share when it actually posted a loss of $1.97, which came as a surprise of -358.14%.

For the past four quarters, the company has failed to beat consensus estimates for earnings per share.

Madison Square Garden Entertainment, which belongs to the Zacks Leisure and Recreation Services industry, reported revenue of $401.22 million for the quarter ended September 2022, exceeding Zacks consensus estimate by 10.11%. This compares to annual sales of $294.51 million. The company has beaten consensus sales estimates three times in the last four quarters.

The sustainability of the immediate price action of the stock based on recently released numbers and future earnings expectations will depend primarily on management’s comments on the earnings release.

Madison Square Garden Entertainment shares are down about 35.8% year-to-date, while the S&P 500 is down -19.7%.

What’s next for Madison Square Garden Entertainment?

While Madison Square Garden Entertainment has underperformed the market so far this year, the question for investors is: Where’s the stock going?

There are no easy answers to this key question, but one reliable metric that can help investors answer this question is the company’s earnings prospects. This includes not only the current consensus earnings expectations for the quarter(s) ahead, but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a trusted rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this earnings release, the trend in estimate revisions for Madison Square Garden Entertainment is mixed. While the magnitude and direction of the estimate revisions could change following the company’s just-released earnings report, the current status puts the stock at a Zacks #3 rank (Hold). The shares are therefore expected to perform in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the coming quarters and the current fiscal year change over the coming days. Current consensus EPS estimate is $1.47 on revenue of $591.8 million for the upcoming quarter and -$0.95 on revenue of $1.93 billion for the current fiscal year.

Investors should keep in mind that the outlook for the industry can also have a material impact on the stock’s performance. In terms of the Zacks Industry Rank, Leisure and Recreation Services is currently in the top 31% of the 250+ Zacks Industries. Our research shows that the top 50% of industries evaluated by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Vail Resorts (MTN Free Report), another stock in the same industry, has yet to report results for the quarter ending October 2022.

This ski resort operator is expected to report a quarterly loss of $3.17 per share in its upcoming report, a +7.9% year-over-year change. The consensus EPS estimate for the quarter has been flat for the last 30 days.

Vail Resorts revenue is expected to be $246.07 million, up 40.2% from the same quarter last year.


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