Starz Entertainment (NASDAQ:STRZ) Releases Earnings Results, Misses Estimates By $0.39 EPS

Starz Entertainment (NASDAQ:STRZ) posted its quarterly earnings data on Thursday. The company reported ($2.02) EPS for the quarter, missing analysts’ consensus estimates of ($1.63) by ($0.39), FiscalAI reports. Starz Entertainment had a negative net margin of 32.52% and a negative return on equity of 30.57%. The firm had revenue of $322.40 million during the quarter.

Here are the key takeaways from Starz Entertainment’s conference call:

• Revenue and profitability improved: Q3 total revenue reached $322 million, while OTT revenue rose 1.7% year over year to $227 million and adjusted OIBDA increased significantly to $44 million. Management reaffirmed its outlook for mid-single-digit adjusted OIBDA growth in 2026.
• Free cash flow and leverage are progressing: Q3 unlevered free cash flow was $19 million and $85 million year to date, with full-year guidance of $100 million-$120 million reaffirmed. Net debt was $601 million and leverage was 2.8x, with management still targeting approximately 2.7x at year-end 2026 and 2.5x or lower in the second half of 2027.
• Owned content is becoming a larger growth and monetization opportunity: Management cited strong performance from “Fightland,” international licensing revenue, and expected additional sales as more owned series enter the portfolio. Starz said “Fightland” cost about $3 million less per hour than comparable prior production, while ownership should support future distribution revenue and greater control over costs.
• Upcoming programming and bundles are supporting engagement: Starz expects the return of “P-Valley” in December and the 18-episode “Power: Origins” in 2027 to drive subscriber acquisition and retention. Management also reported encouraging early results from Peacock, Crunchyroll, and Amazon bundles, including retention above 20% for many bundled offerings and revenue that is accretive versus à la carte sales.
• Traditional distribution remains under pressure: Linear and other revenue was $96 million as secular declines in traditional video households continued, though increased distribution revenue from owned content partly offset the pressure. Starz is also exploring an advertising-supported video-on-demand offering but emphasized that any acquisition or investment would need to preserve leverage discipline and the strength of its core business.

Starz Entertainment Stock Performance

Shares of Starz Entertainment stock opened at $22.09 on Friday. The firm’s 50-day moving average is $24.72 and its 200 day moving average is $20.55. Starz Entertainment has a 1 year low of $8.40 and a 1 year high of $32.58. The company has a debt-to-equity ratio of 2.05, a current ratio of 0.25 and a quick ratio of 0.25. The stock has a market cap of $378.18 million, a price-to-earnings ratio of -0.91 and a beta of 2.55.

Trending Headlines about Starz Entertainment

Here are the key news stories impacting Starz Entertainment this week:

• Positive Sentiment: Third-quarter revenue reached approximately $322.4 million, ahead of expectations, while total and OTT revenue increased both sequentially and year over year. Adjusted OIBDA more than doubled from the prior year. Starz Entertainment third-quarter results
• Positive Sentiment: Digital streaming revenue reached $227 million, and over-the-top bundling increased customer retention by more than 20%. These figures support management’s shift toward streaming and could improve the company’s long-term revenue quality. Starz: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Raymond James upgraded Starz Entertainment to “strong buy” from “outperform” and assigned a $36 price target. The target implies substantial potential upside from recent trading levels and adds support to the bullish case. Raymond James analyst upgrade
• Neutral Sentiment: Management reaffirmed its 2026 and 2027 targets, including OTT revenue growth, leverage reduction, adjusted OIBDA growth, unlevered free cash flow and a 20% adjusted OIBDA margin in the second half of 2027. Achieving those goals will depend on continued execution in a competitive streaming market.
• Negative Sentiment: Starz reported a quarterly loss of $2.02 per share, while Zacks cited a $2.14 loss, missing consensus estimates of $1.63 and $1.33, respectively. Although the loss narrowed from $2.63 a year earlier, the earnings miss may pressure the stock and highlights continuing profitability challenges. Starz third-quarter loss
• Negative Sentiment: Major shareholder Allen Family Capital disclosed a series of stock sales during August and September, collectively reducing its position by a substantial amount. The selling may weigh on sentiment, even though the transactions occurred before the latest earnings release. SEC ownership filing

Analyst Upgrades and Downgrades

A number of analysts have weighed in on STRZ shares. Citizens Jmp started coverage on Starz Entertainment in a report on Monday, September 14th. They set a “market outperform” rating and a $40.00 price target for the company. Wall Street Zen upgraded Starz Entertainment from a “sell” rating to a “hold” rating in a report on Saturday. Deutsche Bank Aktiengesellschaft reaffirmed a “hold” rating and issued a $30.00 price target on shares of Starz Entertainment in a research note on Tuesday, August 18th. Raymond James Financial upgraded shares of Starz Entertainment from an “outperform” rating to a “strong-buy” rating and set a $36.00 price objective on the stock in a report on Friday. Finally, Citigroup initiated coverage on shares of Starz Entertainment in a report on Monday, September 14th. They set an “outperform” rating on the stock. Two analysts have rated the stock with a Strong Buy rating, three have given a Buy rating, three have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $33.71.

Insider Buying and Selling

In other news, major shareholder Allen Family Capital, Llc sold 363,786 shares of the stock in a transaction on Tuesday, September 29th. The stock was sold at an average price of $21.06, for a total transaction of $7,661,333.16. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Over the last ninety days, insiders have sold 1,803,786 shares of company stock valued at $44,912,698. Insiders own 22.62% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in STRZ. BlackRock Inc. bought a new position in Starz Entertainment during the second quarter valued at $35,599,000. Renaissance Technologies LLC purchased a new position in shares of Starz Entertainment during the first quarter valued at $577,000. Connor Clark & Lunn Investment Management Ltd. bought a new stake in shares of Starz Entertainment in the 2nd quarter valued at about $1,411,000. NewEdge Wealth LLC purchased a new stake in Starz Entertainment during the second quarter worth $13,911,000. Finally, Bank of New York Mellon Corp purchased a new stake in shares of Starz Entertainment during the 2nd quarter worth $9,018,000.

Starz Entertainment Company Profile

Starz Entertainment Corp. is a media and entertainment company that operates premium subscription television and streaming services. Its offerings include the STARZ premium network, related linear television channels and the STARZ streaming platform, which provides original series, feature films and licensed entertainment content.

The company’s programming has included original dramas, comedies and franchises, as well as a selection of theatrical and television movies. STARZ content is distributed through traditional pay-TV providers, digital platforms and direct-to-consumer subscriptions, with availability varying by market and distribution partner.

Starz was established in 1994 as a premium television service and was acquired by Lionsgate in 2016.