Key Takeaways
- The fair value estimate of Sphere Entertainment has been lifted from US$75.30 to US$88.30, supported by a slightly lower discount rate and a small increase in revenue growth assumption.
- Bullish analysts, such as Goldman Sachs, point to the company’s execution and revenue potential tied to the Las Vegas Sphere, as well as a fuller content pipeline and recent earnings data.
- Cautious analysts, such as Morgan Stanley, question the durability of current attendance trends and long-term earnings power, despite raising their price target.
- The company’s valuation is sensitive to changes in revenue growth, margins, and earnings, and investors should consider these factors when making investment decisions.
Introduction to Sphere Entertainment
The latest valuation work on Sphere Entertainment has resulted in a moderate step up in the analyst model, with the fair value estimate increasing from US$75.30 to US$88.30. This change is supported by a slightly lower discount rate, which has been adjusted from 10.06% to 9.87%, and a small increase in the revenue growth assumption, which has been updated from 5.83% to 6.03%. These tweaks build on Street research that has become more constructive, with bullish voices pointing to the company’s execution and revenue potential tied to the Las Vegas Sphere.
Bullish Takeaways
Goldman Sachs has steadily raised its Sphere Entertainment price target across multiple updates, most recently to US$98 from US$86 on 6 January 2026. The firm cites confidence in the company’s execution and revenue potential tied to the Las Vegas Sphere, as well as data and company commentary that suggest Sphere residencies can continue to sell out reliably as show counts increase. Seaport Research, with a higher target of US$70 from US$62, points to the addition of artist residency shows through Q3 and into Q2 2026 as a positive near-term factor. This reinforces the view that execution on content scheduling and capacity utilization is central to the story.
Bearish Takeaways
Morgan Stanley, even while raising its price target to US$65 from US$40, keeps an Equal Weight rating and calls out uncertainty around Sphere Entertainment’s long-term earnings power. This signals that some analysts see current valuation as already reflecting a meaningful amount of expected success. Morgan Stanley also notes that the apparent success of the Wizard of Oz residency showcases financial potential but still warrants caution, with questions around how durable that level of performance may be and how it translates into a repeatable earnings base. Goldman’s latest commentary, while positive on momentum into 2026, flags potential shifts in Wizard of Oz attendance related to seasonality and normal show decay.
Valuation and Financials
The company’s valuation is sensitive to changes in revenue growth, margins, and earnings. The latest valuation work has resulted in a small upward tweak to expected top-line expansion, with the revenue growth assumption updated from 5.83% to 6.03%. The net profit margin has also been refined, moving from 10.32% to 10.36%. The future P/E has increased from 25.19x to 29.11x, suggesting that a higher multiple is being applied to the company’s projected earnings in the valuation work. Investors should consider these factors when making investment decisions, as they can have a significant impact on the company’s valuation.
Community and Narratives
The Simply Wall St Community provides a platform for investors to connect the story they believe about a company with the numbers behind it. The Community page allows users to follow the Sphere Entertainment Narrative, which links the company’s business outlook to a financial forecast and a fair value estimate. The Narrative is automatically updated when new news or earnings are factored in, providing investors with a comprehensive view of the company’s valuation and growth prospects. By following the Narrative, investors can stay on top of how the story and valuation are evolving and make informed investment decisions.
Conclusion
The latest valuation work on Sphere Entertainment has resulted in a moderate step up in the analyst model, with the fair value estimate increasing from US$75.30 to US$88.30. Bullish analysts point to the company’s execution and revenue potential tied to the Las Vegas Sphere, as well as a fuller content pipeline and recent earnings data. Cautious analysts question the durability of current attendance trends and long-term earnings power, despite raising their price target. Investors should consider these factors when making investment decisions, as they can have a significant impact on the company’s valuation. By following the Sphere Entertainment Narrative on the Simply Wall St Community page, investors can stay informed and make informed investment decisions.
