Lion’s Gate is currently trading at 50% of its NTM P/E 52 week high.

Lion’s Gate is expected to endure a severe decline in profitability in 2016, yet is expected to rebound in 2017.

Products include distribution, film (MockingJay, Hurt Locker, Juno, the Red Violin), television (Mad Men, Orange is the New Black), video.

Trends affecting the company [1] include “cord-cutting” [2] (that affects viewing and advertising revenue) as well as competition from other at-home entertainment, primarily TV shows and videogames.

What differentiates Lion’s Gate from these trends is that  it is a content provider with no networks or cable assets, limiting its dependence on advertising. The biggest challenges to profitability thus far have been limited popularity from Mortedacai (Johnny Depp) and The Hunger Games. Resultantly, lowered guidance has been the main catalyst in driving the stock south. Longer term, the Company’s success is dependent on its ability to deliver “ok” movies at low cost.

[1] Reference: Thumbs Up for Lionsgate

[2] Cord-cutting: shift to internet delivery media from cable and broadcast