Starz Entertainment Corp. (STRZ): A Bull Case Theory 

We came across a bullish thesis on Starz Entertainment Corp. on TheOracleOfOslo’s Substack. In this article, we will summarize the bulls’ thesis on STRZ. Starz Entertainment Corp.’s share was trading at $9.98 as of January 29th. STRZ’s forward P/E was 3.59 according to Yahoo Finance.

Starz Entertainment (STRZ), the RemainCo from Lionsgate’s recent spin-off, saw its shares surge 75% after listing earlier this year, driven by low initial valuation and a strong Q4 print. However, a weak Q1 result—marked by a 1% sequential decline in OTT subscribers and lower-than-expected OIBDA—led to a 20% pullback, creating what could be an attractive entry point. STRZ operates a dual-revenue model comprising its OTT streaming platform and legacy pay-TV business, with streaming now accounting for nearly 70% of revenue.

Despite subscriber softness, Starz has an entrenched niche in premium content for women and underrepresented audiences, backed by an exclusive output deal with Lionsgate through 2028. Management under CEO Jeffrey Hirsch is executing a clear plan to cut content costs, enhance show ownership, and capture downstream revenue, aiming for sustainable free cash flow generation by FY27. By shifting away from heavy Lionsgate licensing and retaining international rights, STRZ targets a 20% OIBDA margin and $170–$200 million in annual free cash flow, implying less than 2x forward FCFE valuation.

Activist investors, including Liberty 77 Capital and MHR Fund Management, have taken sizable stakes, reinforcing discipline around capital allocation and strategic execution. Potential catalysts include deleveraging toward 2.5x OIBDA, a rebound in subscriber growth with upcoming Power spinoffs, and potential consolidation with smaller linear networks. While competition remains intense and leverage high, STRZ’s discounted valuation, improving cost structure, and possible take-out interest from PE or strategic buyers position the stock for significant upside, potentially doubling from current levels.

Previously we covered a bullish thesis on Roku, Inc. (ROKU) by LongYield in May 2025, which highlighted the company’s platform-led growth, expanding ad ecosystem, and path to profitability. The company’s stock price has appreciated approximately by 66.26% since our coverage. This is because the thesis played out as Roku’s ad and subscription businesses scaled. TheOracleOfOslo shares a similar view but emphasizes Starz Entertainment’s niche positioning and restructuring-driven value creation in streaming.

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Disclosure: None.