Is LION a good stock to buy? We came across a bullish thesis on Lionsgate Studios Corp. on Valueinvestorsclub.com by TheSkeptic. In this article, we will summarize the bulls’ thesis on LION. Lionsgate Studios Corp.'s share was trading at $9.86 as of March 12th. LION’s forward P/E was 46.95 according to Yahoo Finance.

Nicoleta Ionescu/Shutterstock.com

Lionsgate Studios (LION) is a leading motion picture and television production and distribution company with a 20,000+ title IP library, offering both stable library revenues and variable production profits. The recent separation from STARZ has positioned LION as a pure-play, highly strategic studio, significantly reducing the influence of activist shareholder MHR Funds and attracting new activist oversight to drive value-maximizing decisions.

The company’s library generates ~$1 billion in annual revenue at roughly 50% cash margins, providing a durable earnings foundation, while production serves as a growth engine with high variability but potential for substantial upside through tentpole releases like The Hunger Games, John Wick 5, and The Housemaid.

FY25 underperformed due to a weak slate and labor disruptions, but FY26-27 is set for acceleration with a stronger slate and AI-driven efficiencies in content creation, post-production, and marketing, which are expected to lower costs and enhance distribution of library content, further amplifying strategic value. Lionsgate is also exploring divestiture of its 3 Arts talent management business to deleverage ahead of a potential full sale.

The company’s current valuation at $8.31 per share is below precedent M&A multiples, and a sale at mid-to-high teens multiples of Adj. OIBDA could unlock 50–100%+ upside, particularly as strategic buyers ranging from major studios to AI-driven media companies are likely interested. High leverage at 6.5x net debt is mitigated by the recurring, diversified library cash flows, and production loans function as working capital rather than corporate debt. With a combination of operational acceleration, AI-enabled efficiencies, and a likely strategic sale, LION presents a compelling risk/reward profile for both equity and credit investors seeking significant near-term upside.

Previously, we covered a bullish thesis on The Walt Disney Company (DIS) by Investing Intel in May 2025, which highlighted the company’s profitable streaming momentum, global expansion through parks, and strategic content investments driving long-term growth. DIS’s stock price has depreciated by approximately 9.37% since our coverage due to concerns over streaming profitability, weaker film performance, and the ongoing decline of traditional TV networks. TheSkeptic shares a similar view but emphasizes Lionsgate Studios (LION)’s IP library monetization, production slate acceleration, and potential sale as key catalysts, reflecting comparable content-driven upside in the entertainment sector.

Lionsgate Studios Corp. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held LION at the end of the fourth quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of LION as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LION and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years

Disclosure: None.