NEW YORK (TheStreet) -- Lions Gate Entertainment (LGF) shares are getting pressured, down 0.09% to $34.99 on Monday following its fourth 'Hunger Games' movie 'Mockingjay-Part 2's disappointing opening debut at the box office this weekend.
The film generated $101 million in U.S. and Canadian ticket sales, according to Rentrak. This was well below estimates of $120 million, Bloomberg reports.
Even though the results were "healthy," the fourth and final film of the 'Hunger Games' franchise was the lowest grossing in the series.
"It shows that audiences will not automatically show up for the same brand over and over again," said Gitesh Pandya, an analyst at Box Office Guru.
Coming in second at the box office was the latest James Bond film "Spectre"--distributed by Metro-Goldwyn-Mayer Pictures and ColumbiaPictures--which generated $14.6 million. In third place was Twenty-First Century Fox's (FOXA) "The Peanuts Movie," which made $12.8 million.
Separately, TheStreet Ratings team rates LIONS GATE ENTERTAINMENT CP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate LIONS GATE ENTERTAINMENT CP (LGF) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to -$137.73 million or 29.48% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 6.93%.
- 38.58% is the gross profit margin for LIONS GATE ENTERTAINMENT CP which we consider to be strong. Regardless of LGF's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LGF's net profit margin of -8.82% significantly underperformed when compared to the industry average.
- LGF, with its decline in revenue, underperformed when compared the industry average of 7.3%. Since the same quarter one year prior, revenues fell by 13.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- After a year of stock price fluctuations, the net result is that LGF's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Media industry and the overall market, LIONS GATE ENTERTAINMENT CP's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: LGF