The entertainment industry is well-poised for substantial growth and profitability in the upcoming years, backed by growing investment in amusement and theme parks and increasing interest of consumers.

Given the industry’s bright growth prospects, investors could keep fundamentally sound entertainment stocks Emerald Holding, Inc. (EEX - Get Rating), Madison Square Garden Entertainment Corp. (MSGE - Get Rating), and Madison Square Garden Sports Corp. (MSGS - Get Rating) on their radar in 2025.

The entertainment industry is well-positioned to witness significant growth and expansion in the foreseeable future, driven by growing consumer demand amid a rapidly evolving and advancing market worldwide. The market’s prospects are further strengthening with increasing internet penetration, rising disposable income, and the development of attractive attractions.

The media & entertainment market is expected to reach $32.21 billion in 2025 and is projected to value around $46.89 billion by 2030, exhibiting growth at a CAGR of 7.8%. Rapid technological developments swiftly transform the industry and lead to profitable growth in all segments.

Also, as the public prioritizes leisure time, themed adventures, and quality ambiance, the theme park market is expected to grow exponentially. Organizations are emphasizing on building and designing theme parks based on popular movies and series to attract more crowds. Further, rising disposable incomes have resulted in increasing consumer spending on amusement park visits.

Further, propelled by the surging consumption of internet-based entertainment, including web series, sports, online video gaming, podcasts, and others, the global online entertainment market is flourishing. The market is projected to grow to $338.96 billion by 2034 at a CAGR of 12.8%.

With these favorable trends in mind, let’s look at the fundamentals of the three best Entertainment – Sports & Theme Parks stocks, beginning with the third choice.

Stock #3: Emerald Holding, Inc. (EEX - Get Rating)

EEX operates business-to-business (B2B) trade shows. The company offers B2B trade show franchises and, B2B print publications and digital media products, which provide industry-specific business news and information across various sectors.

EEX’s trailing-12-month gross profit margin and EBIT margin of 64.88% and 16.70% are 23.3% and 67.7% higher than the respective industry averages of 52.62% and 9.96%. Further, the stock’s trailing-12-month Levered FCF margin of 16.07% is 81.6% higher than the industry average of 8.85%.

EEX’s revenues increased marginally year-over-year to $72.60 million for the third quarter that ended September 30, 2024. Its adjusted EBITDA reached $12.50 million, up 15.7% from the prior year’s quarter. Also, the company’s free cash flow rose 21.8% from the year-ago value to $6.70 million.

Analysts expect EEX’s revenue for the fourth quarter (ended December 2024) to increase 6.5% year-over-year to $108.05 million, while its EPS for the same quarter is expected to be $0.04. For the fiscal year 2024, the company’s revenue is expected to grow 4.5% from the prior year to $400.05 million.

EEX’s stock has gained 12.8% over the past three months to close the last trading session at $4.68.

EEX’s solid prospects are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.

The stock has an A grade for Sentiment. It is ranked #3 of 12 stocks within the Entertainment – Sports & Theme Parks industry.

In addition to the POWR Ratings I’ve just highlighted, you can see EEX’s ratings for Growth, Value, Stability, Quality, and Momentum here.

Stock #2: Madison Square Garden Entertainment Corp. (MSGE - Get Rating)

MSGE engages in the live entertainment business. It produces, presents, and hosts live entertainment events, like concerts, sporting events, family shows, family shows, performing arts events, and special events. It operates a collection of venues, including Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, and The Chicago Theatre.

MSGE’s trailing-12-month EBIT margin of 13.29% is 33.5% higher than the industry average of 9.96%. Likewise, the stock’s trailing-12-month net income margin of 18.38% is significantly higher than the industry average of 3.81%. Also, its trailing-12-month ROTC of 8.67% is 119.5% higher than the 3.95% industry average.

For the first quarter that ended September 30, 2024, MSGE posted total revenues of $138.71 million. The company’s adjusted operating income was $1.91 million, against an operating loss of $220 thousand in the prior year’s quarter. In addition, its cash, cash equivalents, and restricted cash were $37.61 million as of September 30, 2024, compared to $33.55 million as of June 30, 2024.

Street expects MSGE’s revenue and EPS for the third quarter (ending March 2025) to increase 1.3% and 266.2% year-over-year to $231.19 million and $0.22, respectively. Also, the company topped the consensus revenue and EPS estimates in three of the trailing four quarters.

Shares of MSGE have soared 2.5% over the past month and 9.9% over the past year to close the last trading session at $35.48.

MSGE’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Sentiment. MSGE is ranked #2 out of 12 stocks in the Entertainment – Sports & Theme Parks industry.

Click here to access additional MSGE ratings for Stability, Growth, Value, Quality, and Momentum.

Stock #1: Madison Square Garden Sports Corp. (MSGS - Get Rating)

MSGS is a professional sports company. It owns and operates a portfolio of assets that consists of the New York Knickerbockers of the National Basketball Association (NBA) and the New York Rangers of the National Hockey League.

On October 17, 2024, MSGS and the Department of Culture and Tourism – Abu Dhabi announced a new marketing partnership named ‘Experience Abu Dhabi’ as the Official Patch Partner of the New York Knicks, forging a significant integration between DCT Abu Dhabi and one of the most storied franchises in professional sports.

MSGS reported revenues of $53.31 million, up 23.8% year-over-year during the first quarter that ended September 30, 2024. The company’s interest income grew 90.7% from the year-ago value to $864 thousand. Furthermore, the company’s total assets came in at $1.37 billion as of September 30, 2024, compared to $1.35 billion as of June 30, 2024.

Analysts expect MSGS’ EPS for the third quarter (ending March 2025) to increase 5.1% year-over-year to $1.65. The company’s revenue for the ongoing quarter is projected to grow 1.8% year-over-year to $437.63 million. Moreover, the company topped the consensus EPS and revenue estimates in three of the trailing four quarters.

MSGS’ stock gained 8.1% over the past six months and 13.9% over the past year to close the last trading session at $215.20.

MSGS’ POWR Ratings reflect its robust outlook. The stock has a B grade for Quality and Sentiment. MSGS has topped the list of 12 stocks within the same industry.

To access additional ratings of MSGS for Stability, Growth, Value, and Momentum, click here.

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MSGS shares were trading at $217.00 per share on Friday afternoon, up $1.80 (+0.84%). Year-to-date, MSGS has declined -3.85%, versus a 1.96% rise in the benchmark S&P 500 index during the same period.

About the Author: Rjkumari Saxena

Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions. More...

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