Starz Entertainment (NASDAQ: STRZ) stock glimmered on Friday. The premium media veteran posted its first earnings report as a stand-alone company, and investors were impressed. The stock price surged 24.2% higher by 10:30 a.m. ET, backing down to a 20% gain 90 minutes later.
How Starz Entertainment’s numbers stacked up
The former Lionsgate Studios (NYSE: LION) division saw fourth-quarter 2025 sales fall 6.2% year over year to $330.6 million. Adjusted operating income before depreciation and amortization (OIBDA, one of the company’s favorite profitability metrics) more than doubled from $45.5 million to $93.3 million. Starz collected $201.5 million in adjusted OIBDA for the full fiscal year, just ahead of management’s guidance target of $200 million.
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The Starz Network service had 19.6 million North American subscribers at the end of this reporting period, including 12.3 million subscribers to its digital streaming channel.
The company didn’t report earnings per share, given the recent separation from Lionsgate. Earnings figures will start in the next report, which will reflect the second quarter of fiscal year 2025 — Starz will align its fiscal year with the calendar year from now on.
Image source: Getty Images.
Looking to the future
In hindsight, it seems Lionsgate could have earned more money from its Starz spinoff. The stock is already up 75% since the May 7 separation.
The earnings report was a mixed bag, with soaring OIBDA profits but lower sales. That works out to a more efficient operation overall. It will be interesting to see whether this was a one-time effect of the Lionsgate spinoff or a sustainable long-term business advantage. Starz shares don’t look expensive even now, trading at 1.2 times trailing sales and 8 times OIBDA.
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
