Lion’s Gate Entertainment Corp. (LGF) is set to report FQ3 2014 earnings after the market closes on Thursday, February 6th. Lion’s Gate Entertainment (LGF) produced one of the most anticipated films of the year, the 2nd installment of the “Hunger Games” series, “The Hunger Games: Catching Fire”. The film grossed $161million dollars in the opening weekend between the United States and Canada, exceeded the opening weekend revenue of the first film in the series which brought in $152.5million last year. This quarter investors have high expectations from LGF.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
(Click Here to see All Estimates for LGF)
The current Wall Street consensus expectation is for LGF to report 51c EPS and $832.45M revenue while the current Estimize.com consensus from Buy Side and Independent contributing analysts is 60c EPS and $880.11M revenue. This quarter the buy-side as represented by the Estimize.com community is expecting LGF to beat the Wall Street consensus on both profit and revenue by a formidable margin.
Over the previous 5 quarters for which there is sufficient data the consesus from Estimize.com has been more accurate than Wall Street in forecasting LGF’s EPS and revenue 3 and 2 times respectively. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market’s actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case we are seeing a larger differential compared to previous quarters.
The distribution of estimates published by analysts on the Estimize.com platform range from 54c to 69c EPS and $856.45M to $930.00M in revenues. This quarter we’re seeing an average distribution of estimates compared to other quarters.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution of estimates signaling less agreement in the market, which could mean more volatility post earnings.
Throughout the quarter the EPS estimate from Wall Street decreased from 54c to 51c and the Estimize consensus fell from 62c to 60c. Wall Street increased its revenue expectation from $818.42M to $832.45M while the Estimize forecast dropped from $888.00M to $880.11M. Timeliness is correlated with accuracy and falling analyst expectations at the end of the quarter are often a bearish indicator. However, this quarter even after declining the Estimize community consensus is still far higher than Wall Street’s.
The analyst with the highest estimate confidence rating this quarter is TheEmulator23 who projects 58c EPS and $888.23M in revenue. In the Winter 2014 season TheEmulator23 rated as the 23th best analyst and is ranked 24th overall among over 3,750 contributing analysts. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case TheEmulator23 is expecting Lion’s Gate to beat the Estimize consensus on revenue but report between Estimize and Wall Street on profit.
This quarter contributing analysts from Estimize.com have high expectations for Lion’s Gate Entertainment. Investors are expecting “The Hunger Games: Catching Fire” to bring in a hefty pile of cash. While profit expectations are not as high as last year, analysts are projecting $100 million in additional revenue compared to FQ3 last year.
Get access to estimates for LGF published by your Buy Side and Independent analyst peers and follow the rest of earnings season by heading over to Estimize.com. Register for free to create your own estimates and see how you stack up to Wall Street.