IMO LGF, based on 3 billion in sales is worth between $38 -$53
$53 would be an acquisition value based on 2.5x sales (see Acquisitiona Analysis thread for more details)
$38 is based on 14.5x my EBITDA projection of $366.5million (LGF stated that EBITDA tracks Free Cash Flow and the average Price to Cash multiple 14-15x for the industry so I use 14.5x)
However, this can change dramatically with explosive growth of TVGN or other revenues. For example, if TVGN achieves valuation of $1.1billion in one year due to dramatic viewership ratings, then add at least $5 (based on my comparison analysis of TVGN to AMCX) to the range making it $43 - $58
In addition...the whole content craze/bubble can wildly upgrade this range as new digital players are coming to the field every day---especially internationally. AND the CATCHING FIRE/DIVERGENT mania will certainly have a temporary effect of inflating stock prices---keep some trading shares handy
Here is another valuation for $52 in line with the other estimates provided within this thread. Just wait for upgrades next year...this will be the price target IMO.
Here are the average estimates as provided by 12 analysts via Thomson Reuters:
2013 Actual: 1.12
2014 Est: 1.08
2015 Est: 1.59
Total 3yrs 3.79
x 140M shares
=531M Net Income for 3 years
241M Add back 3 years estimated Interest expense
24 M Add back 3 years Depreciation and Amortization
130 M Add back Taxes- no taxes until 2015 37% estimated
926 EBITDA included in estimates of Analysts
1,000M 3 Year EBITDA guidance provided by LGF
74 additional income not included in estimates
..52/share (based on 140M shares diluted)
x 25.27 factor (average P/E based on 2015 EPS)
$13/share upside -------add this to current avg. PT $38.90 + $22 (additional EBITDA) = $52 PT
Are the analysts going to be giving upward revisions as LGF proves that they can do $1B in EBITDA?
Based on this analysis, it appears so
Well the price DIS paid for Lucus I don't think can be compared with LGF. To much in merchandize sales with Lucus. I dont think you could use MVL eaither for the same reasons.
I will say I saw the new Matt Damon flick on Imax this weekend and a good preview for Enders was attached to it.
Hello Wanna -
Thanks a million for your detailed opinion. You have been right from day one. My fear of downgrades froom GS and others CNBC etc is overcome with your opinion. I really appreciate your time and thoughts.
Also, i wanted to point out that they just opened March 2014 opitions (Good for next 8 month). I know you had mentioned you may be interested. This will cover the release time of Enders Game, Catching fire and possibly Divergent. Anyway,
Good luck and Thanking you once again!