Key Takeaways
- Sphere <a href="https://comicvibe.com/netnewsledger-the-technologies-behind-canadas-changing-<a href="https://comicvibe.com/banijay-entertainment-unites-us-operations-with-banijay-america-following-all3media-merger/” title=”Banijay Entertainment Unites US Operations With Banijay America Following All3Media Merger”>entertainment-habits/” title=”NetNewsLedger – The Technologies Behind Canada's Changing Entertainment Habits”>Entertainment shares fell 12% after Craig-Hallum downgraded the stock to Hold and cut its price target to $132 from $170.
- The analyst says demand for The Wizard of Oz show is weakening faster than he expected, and Sphere’s own ticket-sales milestones show the same thing.
- Ticket sales have slowed from roughly $40 million a month to under $30 million a month since June, while about as many tickets are still selling.
- Even after the drop, the stock trades well above its three-year average multiple of forward revenue, so Sphere’s next quarterly report is the one to watch.
Sphere Entertainment (SPHR) shares sank 12% on Monday after Craig-Hallum analyst Ryan Sigdahl downgraded the stock from Buy to Hold before the open and cut his price target from $170 to $132. (Which, to be clear, is still higher than the stock’s price beforetoday’s fall. But I digress.)
His reason? Demand for The Wizard of Oz at Sphere is “softening faster than expected,” and he’s cutting his estimates.
That matters when one show runs the Las Vegas venue.
The numbers back him up
Last Monday, Sphere said the show had passed $500 million in ticket sales, with more than 4 million tickets sold since it opened on Aug. 28, 2025. In June, the company put those figures at $400 million and 3 million tickets.
So the first $400 million took about nine and a half months, roughly $40 million a month. The next $100 million took about three and a half months, under $30 million a month. (Sphere announces round milestones, so treat these as rough.)
Tickets kept selling at about the same pace, but it sure sounds like prices are slipping, from, say, $133 a ticket on average for the first 3 million to roughly $100 for the next million.
Put differently, people are still coming, just at lower prices.
How much rides on one show
All 220 Sphere Experience performances in the three months ending in June were The Wizard of Oz, according to the company. Let’s check anlyst estimates:
Analysts already expect revenue to level off near $1.4 billion through 2028, and even that needs Oz to keep selling until the next show is ready. A bull cutting his estimates is the first sign those numbers could come down.
Meanwhile, the stock isn’t cheap. At Friday’s close, Sphere traded at 3.7 times forward revenue (enterprise value over the next 12 months’ sales), against a 2.5x average since 2023…
Today’s drop only takes that to about 3.3x.
Is the downgrade fair?
I think Sigdahl is right to step aside. A stock priced well above its usual multiple needs growth, and the one show carrying Sphere is bringing in less each month.
To be fair, 4 million people have seen The Wizard of Oz in about 13 months, and it’s still adding revenue. Sphere’s next quarterly report will show how much per-show revenue has actually slipped, and that’s going to be the big number to watch. In the meantime, I see no reason to start investing.
So what is Sphere Entertainment stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Sphere Entertainment could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
