FQ4: Showing the Benefits of Improved Film Performance

Research evidence excerpt

FQ4: Showing the Benefits of Improved Film Performance

TD Cowen Lionsgate Studios Corp.

Global Research May 21, 2026

VALUATION METHODOLOGY AND RISKS

Valuation Methodology

Entertainment:

Generally, our valuation methodology is based on a discounted cash flow (DCF) analysis. In

some instances we will use the forward price-to-earnings (P/E) ratio, the forward enterprise

value-to-earnings before interest, taxes, depreciation, and amortization ratio (EV/EBITDA), or

a sum-of-the-parts valuation as our primary metric; we consider all valuation techniques when

establishing valuation targets.

We make investment recommendations on certain early stage, pre-revenue companies based

upon an assessment of their business model, technology, probability of market success,

and the potential market opportunity, balanced by an assessment of applicable risks. Such

companies may not be assigned a price target.

Investment Risks

(1) The global macroeconomic environment worsens, impacting the advertising market. (2)

Availability of other entertainment options decreases viewing of movies and/or television.

(3) New government regulations impact the current system of content distribution. (4) New

entrants into either content distribution or content production disrupt the existing value chain,

resulting in reduced revenues and/or compressed margins for our companies under coverage.

(5) Technological changes cannibalize existing content windows or allow consumers to bypass

existing distribution channels. (6) Content owners are unable to continue levying rate increases

on content distributors due to effective push-back from the MVPDs.

Risks To The Price Target

(1) Lionsgate could be acquired sooner than we expect. (2) Lionsgate could engage in value-

destructive or value-creative M&A.