Madison Square Garden Sports Corp. (NYSE: MSGS)

Sector: Communication Services Industry: Entertainment CIK: 0001636519
Market Cap 6.21 Bn
P/B -21.12
P/E -262.20
P/S 6.06
ROIC (Qtr) -0.25
Div Yield % 0.00
Rev 1y % (Qtr) -25.99
Total Debt (Qtr) 1.17 Bn
Debt/Equity (Qtr) -3.99

About

Madison Square Garden Sports Corp., commonly recognized by its ticker symbol MSGS, is a Delaware corporation that operates in the sports and entertainment industry. The company's primary business activities include owning and operating professional sports teams, managing and operating the Madison Square Garden Arena, and generating revenue through ticket sales, sponsorship and signage, media rights, and premium hospitality. The company's main portfolio of assets features some of the most recognized teams in the world of sports, including the New...

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 29.18M exceeds capital expenditure of 3.63M by 8.03x, indicating strong organic growth funding capability.
  • Operating cash flow of 32.81M provides strong 10.11x coverage of operating expenses 3.25M, showing operational efficiency.
  • Strong tangible asset base of 1.19B provides 3.60x coverage of intangibles 330.17M, indicating robust asset quality.
  • Free cash flow of 29.18M provides solid 8.99x coverage of operating expenses 3.25M, showing operational efficiency.
  • Operating cash flow of 32.81M provides strong 9.03x coverage of capital expenditure 3.63M, enabling organic growth.

Bear case

  • Operating cash flow of 32.81M barely covers its investment activities of (7.61M), with a coverage ratio of -4.31, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 32.81M provides thin coverage of dividend payments of (533000) with a -61.56 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 32.81M provides insufficient coverage of deferred revenue obligations of 331.22M, which is 0.10x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 32.81M shows concerning coverage of stock compensation expenses of 18.51M, with a 1.77 ratio indicating potential earnings quality issues.
  • Operating earnings of 1.15M show weak coverage of depreciation charges of 3.25M, with a 0.36 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 398.09 Bn 38.16 9.18 14.46 Bn
2 DIS Walt Disney Co 204.13 Bn 16.46 2.16 42.03 Bn
3 WBD Warner Bros. Discovery, Inc. 70.69 Bn 145.75 1.87 33.52 Bn
4 FWONA Liberty Media Corp 53.12 Bn -399.43 13.15 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 33.40 Bn 103.67 1.36 9.39 Bn
6 FOXA Fox Corp 33.26 Bn 16.34 2.02 6.60 Bn
7 PSKY Paramount Skydance Corp 18.94 Bn -1,353.00 0.66 14.73 Bn
8 TKO TKO Group Holdings, Inc. 17.56 Bn 76.76 4.05 4.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.77 1.53
EV to Cash from Ops. EV/CFO 220.78 25.10
EV to Debt EV to Debt 6.17 5.03
EV to EBIT EV/EBIT 6,282.87 165.24
EV to EBITDA EV/EBITDA -6,603.59 -156.71
EV to Free Cash Flow [EV/FCF] EV/FCF 248.27 72.07
EV to Market Cap EV to Market Cap 1.17 2.12
EV to Revenue EV/Rev 7.06 6.42
Price to Book Value [P/B] P/B -21.12 2.40
Price to Earnings [P/E] P/E -262.20 -114.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -44.45 1.03
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -17.28
Dividend per Basic Share Div per Share (Qtr) 0.00 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 7.73
Interest Coverage Int. cover (Qtr) 0.05 -38.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -156.03 -33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -1.39 248.04
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -98.40 -100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -100.70 -28.24
EBIT Growth (1y) % EBIT 1y % (Qtr) -99.24 -85.91
EBT Growth (1y) % EBT 1y % (Qtr) -116.02 24.10
EPS Growth (1y) % EPS 1y % (Qtr) -133.56 18.31
FCF Growth (1y) % FCF 1y % (Qtr) -75.42 118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -35.08 30.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.01 0.04
Cash Ratio Cash Ratio (Qtr) 0.09 0.45
Current Ratio Curr Ratio (Qtr) 0.39 1.09
Debt to Equity Ratio Debt/Equity (Qtr) -3.99 1.01
Interest Cover Ratio Int Coverage (Qtr) 0.05 -38.17
Times Interest Earned Times Interest Earned (Qtr) 0.05 -38.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.40 -65.26
EBIT Margin % EBIT Margin % (Qtr) 0.11 -79.53
EBT Margin % EBT Margin % (Qtr) -1.95 -82.47
Gross Margin % Gross Margin % (Qtr) 26.30 35.56
Net Profit Margin % Net Margin % (Qtr) -2.30 -83.18