Key Takeaways
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Stock Decline: Sphere Entertainment shares dropped 12% after Craig-Hallum downgraded the stock from Buy to Hold, lowering its price target from $170 to $132.
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Demand Issues: The demand for the “Wizard of Oz” show is weakening faster than anticipated, which was echoed by Sphere’s ticket-sales milestones.
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Sales Performance: Ticket sales decreased from approximately $40 million per month to less than $30 million since June, despite ticket volume remaining steady.
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Valuation: Even post-decline, the stock is valued higher than its three-year average forward revenue multiple; the upcoming quarterly report is crucial.
The Numbers Back Him Up
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Sphere announced last week that “Wizard of Oz” has surpassed $500 million in ticket sales, with 4 million tickets sold since its premiere on August 28, 2025. In contrast, the company reported $400 million and 3 million tickets in June.
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The initial $400 million took about 9.5 months to generate (around $40 million/month), while the next $100 million came in just 3.5 months (less than $30 million/month). Ticket prices seem to be slipping, suggesting that while attendance remains stable, revenue per ticket may be falling.
How Much Rides on One Show
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All 220 performances at the Sphere in the three months ending June featured “Wizard of Oz”. Analyst estimates indicate revenue might level off around $1.4 billion through 2028, heavily relying on the continued success of this show until the next one opens.
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The stock currently trades at 3.7 times forward revenue, above its historical average of 2.5 times since 2023. Following the recent drop, it stands at approximately 3.3 times.
Is the Downgrade Fair?
- Analyst Ryan Sigdahl’s decision to downgrade appears justified, as the stock is priced above its typical multiple while revenue from its sole major show is declining. Despite 4 million attendees in around 13 months, the average revenue per show is essential to monitor in their next quarterly report.
So What is Sphere Entertainment Stock Actually Worth?
- TIKR provides a free tool to forecast stock prices, allowing users to input assumptions to assess Sphere Entertainment’s value based on Wall Street consensus estimates or personal projections.
Value Sphere Entertainment for free
Disclaimer:
Please note that articles on TIKR are not intended to serve as investment or financial advice nor recommendations to buy or sell stocks. The content is based on investment data and analysts’ estimates. TIKR has no position in any mentioned stocks. Thank you for reading, and happy investing!
