Madison Square Garden Entertainment Corp. (NYSE: MSGE)

Sector: Consumer Cyclical Industry: Leisure CIK: 0001952073
Market Cap 2.95 Bn
P/B 81.89
P/E 56.80
P/S 2.91
ROIC (Qtr) 6.73
Div Yield % 0.00
Rev 1y % (Qtr) 12.89
Total Debt (Qtr) 1.20 Bn
Debt/Equity (Qtr) 33.20
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About

Madison Square Garden Entertainment Corp., or MSGE, is a Delaware corporation that operates in the live entertainment industry. With its principal executive offices located in New York, NY, MSGE is a leading company in the provision of iconic venues and marquee entertainment content. The company's business activities are conducted through MSG Entertainment Holdings, LLC and its direct and indirect subsidiaries. MSGE's main business activities include live entertainment, sports, and hospitality. The company generates revenue through its portfolio...

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Investment thesis

Bull case

  • Healthy cash reserves of 157.58M provide 2.20x coverage of short-term debt 71.68M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 192.68M exceeds capital expenditure of 21.31M by 9.04x, indicating strong organic growth funding capability.
  • Tangible assets of 1.69B provide exceptional 6.76x coverage of deferred revenue 250.01M, showing strong service capability backing.
  • Tangible assets of 1.69B provide robust 6.76x coverage of other current liabilities 250.01M, indicating strong asset backing.
  • Operating cash flow of 213.99M provides strong 2.39x coverage of operating expenses 89.35M, showing operational efficiency.

Bear case

  • Operating cash flow of 213.99M barely covers its investment activities of (22.70M), with a coverage ratio of -9.43, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 213.99M provides insufficient coverage of deferred revenue obligations of 250.01M, which is 0.86x, raising concerns about future service delivery capabilities.
  • Operating earnings of 131.19M show weak coverage of depreciation charges of 57.86M, with a 2.27 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 192.68M represents just -8.25x of debt issuance (23.36M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 224.09M provide limited buffer against comprehensive income items of (31.12M), which is -7.20x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Leisure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AS Amer Sports, Inc. 22.38 Bn 71.89 3.67 1.87 Bn
2 HAS Hasbro, Inc. 13.30 Bn 46.47 3.26 3.32 Bn
3 PLNT Planet Fitness, Inc. 7.78 Bn 37.79 6.04 2.58 Bn
4 GOLF Acushnet Holdings Corp. 7.40 Bn 80.24 4.75 0.90 Bn
5 LTH Life Time Group Holdings, Inc. 6.29 Bn 21.85 2.16 4.13 Bn
6 MAT Mattel Inc /De/ 5.43 Bn 12.57 1.04 2.59 Bn
7 YETI YETI Holdings, Inc. 3.97 Bn 24.75 2.17 0.22 Bn
8 MSGE Madison Square Garden Entertainment Corp. 2.95 Bn 56.80 2.91 1.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.27 1.19
EV to Cash from Ops. EV/CFO 19.32 -6.09
EV to Debt EV to Debt 3.46 14.49
EV to EBIT EV/EBIT 31.51 -159.90
EV to EBITDA EV/EBITDA 21.71 -4.06
EV to Free Cash Flow [EV/FCF] EV/FCF 21.45 0.74
EV to Market Cap EV to Market Cap 1.40 -0.64
EV to Revenue EV/Rev 4.07 4.65
Price to Book Value [P/B] P/B 81.89 4.75
Price to Earnings [P/E] P/E 56.80 12.00
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.51
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.11
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.13
Interest Coverage Int. cover (Qtr) 2.92 -30.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 24.31 -13.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 185.37 1,190.33
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 13.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -65.20 -111.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.58 -165.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 4.63 -1,562.20
EBT Growth (1y) % EBT 1y % (Qtr) 23.61 -1,555.34
EPS Growth (1y) % EPS 1y % (Qtr) -57.79 -377.44
FCF Growth (1y) % FCF 1y % (Qtr) 204.03 10.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.35 17.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.56 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.25 3.31
Current Ratio Curr Ratio (Qtr) 0.68 4.80
Debt to Equity Ratio Debt/Equity (Qtr) 33.20 2.35
Interest Cover Ratio Int Coverage (Qtr) 2.92 -30.68
Times Interest Earned Times Interest Earned (Qtr) 2.92 -30.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.60 -57.55
EBIT Margin % EBIT Margin % (Qtr) 12.93 -65.38
EBT Margin % EBT Margin % (Qtr) 8.50 -69.55
Gross Margin % Gross Margin % (Qtr) 45.20 46.51
Net Profit Margin % Net Margin % (Qtr) 5.10 -74.45