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Lions Gate Entertainment Corp. (USA) (LGF): This Stock’s Rally Could Stretch Beyond 2014

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Lions Gate Entertainment Corp. (USA) (NYSE:LGF), one of the largest home entertainment and feature film companies, is up more than 60% this year. The company is riding on its two major releases in 2012, and seems to be heading even further based on this year’s schedule of events.

Lions Gate Entertainment Corp. (USA) (NYSE:LGF)

The Santa Monica, CA-based, theater company is also growing revenue and earnings at a remarkable rate, which signifies the solid returns from its most recent feature film releases along with a various TV series aired by some of the largest networks. Lions Gate is renowned for the production of motion picture films such as The Twilight Saga, The Expendables, and the Hunger Games. The company also engages in TV series production featuring Weeds, Mad Men, Anger Management, and Nashville, among others.

Fiscal year 2013 revenue up 71%

Lions Gate Entertainment Corp. (USA) (NYSE:LGF) reported Q4 and FY2013 results late in May, beating analyst estimates in all aspects. Notably, the company’s revenue rose a massive 71% to $2.71 billion compared to last year’s $1.59 billion. EBITDA came at $329.7 million, up from $71.6 million reported in 2012, while non-GAAP earnings rose from a loss of $39.1 million, or $0.30 per share, reported last year to a net income of $232.1 million, or $1.73 per share.

Adjusted earnings were $190.1 million, or $1.41 per share, compared to last year’s loss of $13.1 million, or $0.10 per share. The company’s free cash flow also rose from last year’s deficit of $86.9 to a surplus of $280.5 million. Deferred revenue not included in the results amounted to $1.1 billion.

“We completed a stellar fiscal 2013 with an outstanding fourth quarter that reflected strong contributions from our young adult franchises as well as the rest of our theatrical slate and our home entertainment and international businesses,” said Lions Gate Chief Executive Officer Jon Feltheimer. “We are performing ahead of plan for all of our metrics, and we’re pleased with the financial strength of our diverse portfolio of businesses and our strong and growing momentum building Lions Gate into a next generation global content leader.”

Lions Gate generated $2.33 billion from its Motion Picture segment in Fiscal year 2013, up 96% from the previous year. This unit accounts for 86% of Lions Gate Entertainment Corp. (USA) (NYSE:LGF) revenue with Television production contributing just 14%.

The Hunger Games: Catching Fire should be a massive upside

The Hunger Games, released on March 26, 2012, earned $686.5 million, making it the highest earning motion picture film released outside the holiday season. Overall, The Hunger Games is the thirteenth highest earning film ever released. The next part of the film, The Hunger Games: Catching Fire, is scheduled for release on November 22 this year, coinciding well with the holiday season.

Being a follow-up to the first part, it should attract more audience based on the performance of its predecessor. Additionally, the holiday season should also boost the film’s earnings, which could push it right to the top of the earnings list.

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