Value
3.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 2.2 |
| P/S | 7.3 |
| EV/EBITDA | 0.0 |
| Analyst target | 4.0 |
SPHR · Why this verdict
Why Sphere Entertainment (SPHR) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Sphere Entertainment has beaten analyst estimates in all 4 of the last reported quarters with an average positive surprise of 269%, including a 580% beat in February 2026 and a 363% beat in August 2025 — suggesting the business is dramatically outperforming conservative analyst modeling. Earnings | Earnings beats continue in at least 3 of the next 4 quarters, even if average surprise moderates to 50%, confirming that the company's revenue model is consistently stronger than what analysts project. | →Stable |
| CounterBeats of this magnitude typically indicate that analysts are working with incomplete information about a novel business model rather than persistent operational excellence; as the Sphere matures and gets covered by more analysts, surprise magnitude will likely compress toward single digits. | ||
Revenue is growing at 38% year-over-year, earning the highest possible growth score of 10.0 out of 10, and the company ranks 7.86 out of 10 among peers on growth, demonstrating that the Sphere entertainment concept is generating strong commercial demand. Growth breakdown | Revenue growth remains above 20% year-over-year in at least 3 of the next 4 reported quarters, sustaining the company's position as a high-growth entertainment operator. | →Stable |
| CounterThe company's only operating venue is the Las Vegas Sphere, creating extreme concentration: growth depends entirely on residency programming and sponsorship deals at a single facility, which limits how large or durable the growth can be. | ||
Short interest at 36% of float is flagged as high by the risk model, and the stock has already exceeded its analyst price target (the bull case notes -8% upside remaining), meaning new buyers are paying beyond consensus fair value while 36% of float is in short positions betting on a decline. Key risks | Short interest falls below 20% within 6 months as strong earnings data forces short sellers to cover, and analyst targets are revised upward by at least 15% to reflect the improved earnings trajectory. | →Stable |
| CounterHigh short interest in a stock trading above its price target with negative asymmetry (-8% upside, 15% downside per the calculation) is a rational positioning by sophisticated investors; the burden of proof for longs is very high at current price levels. | ||
Free cash flow represents 370% of reported net income, indicating that non-cash charges (depreciation on the high-cost Sphere asset) are masking the underlying cash generation potential of the business, and the overall quality score is 4.7 out of 10 with an economic moat score of 7.1. Quality breakdown | Free cash flow per share grows by at least 25% year-over-year over the next annual reporting period, confirming that cash generation is accelerating as the Sphere's fixed cost base is leveraged over growing revenue. | →Stable |
| CounterA quality score of 4.7 is below average, return on assets scores 0.0, and the business had an operating margin component of only 1.1 out of 10, meaning that despite strong cash conversion, the core operating economics remain challenged. | ||
Sphere Entertainment has beaten analyst estimates in all 4 of the last reported quarters with an average positive surprise of 269%, including a 580% beat in February 2026 and a 363% beat in August 2025 — suggesting the business is dramatically outperforming conservative analyst modeling.
→StableEarnings
- Expectation
- Earnings beats continue in at least 3 of the next 4 quarters, even if average surprise moderates to 50%, confirming that the company's revenue model is consistently stronger than what analysts project.
CounterBeats of this magnitude typically indicate that analysts are working with incomplete information about a novel business model rather than persistent operational excellence; as the Sphere matures and gets covered by more analysts, surprise magnitude will likely compress toward single digits.
Revenue is growing at 38% year-over-year, earning the highest possible growth score of 10.0 out of 10, and the company ranks 7.86 out of 10 among peers on growth, demonstrating that the Sphere entertainment concept is generating strong commercial demand.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 20% year-over-year in at least 3 of the next 4 reported quarters, sustaining the company's position as a high-growth entertainment operator.
CounterThe company's only operating venue is the Las Vegas Sphere, creating extreme concentration: growth depends entirely on residency programming and sponsorship deals at a single facility, which limits how large or durable the growth can be.
Short interest at 36% of float is flagged as high by the risk model, and the stock has already exceeded its analyst price target (the bull case notes -8% upside remaining), meaning new buyers are paying beyond consensus fair value while 36% of float is in short positions betting on a decline.
→StableKey risks
- Expectation
- Short interest falls below 20% within 6 months as strong earnings data forces short sellers to cover, and analyst targets are revised upward by at least 15% to reflect the improved earnings trajectory.
CounterHigh short interest in a stock trading above its price target with negative asymmetry (-8% upside, 15% downside per the calculation) is a rational positioning by sophisticated investors; the burden of proof for longs is very high at current price levels.
Free cash flow represents 370% of reported net income, indicating that non-cash charges (depreciation on the high-cost Sphere asset) are masking the underlying cash generation potential of the business, and the overall quality score is 4.7 out of 10 with an economic moat score of 7.1.
→StableQuality breakdown
- Expectation
- Free cash flow per share grows by at least 25% year-over-year over the next annual reporting period, confirming that cash generation is accelerating as the Sphere's fixed cost base is leveraged over growing revenue.
CounterA quality score of 4.7 is below average, return on assets scores 0.0, and the business had an operating margin component of only 1.1 out of 10, meaning that despite strong cash conversion, the core operating economics remain challenged.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sphere Entertainment has beaten analyst earnings estimates in all 4 of the last reported quarters with an extraordinary average surprise of 269%, growing revenue at 38% year-over-year, but 36% short interest, rich valuation, a stock already past its analyst target, and negative asymmetry at current prices limit the investment case for new buyers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.8 |
| ROA | 0.0 |
| Gross margin | 7.0 |
| Op margin | 1.1 |
| Net margin | 4.3 |
| Current ratio | 4.7 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 370% FCF/NI
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 38% YoY
Momentum
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.6 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.3 |
| Price target | 5.6 |
| erm sentiment | 5.5 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 5.5 |
| growth rank | 8.2 |
- ▸Industry growth leader
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.1 |
| support resistance | 2.6 |
| 52w position | 8.8 |
Risk (lower is worse)
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 0.0 |
| volatility | 1.3 |
| put call | 9.2 |
| implied vol | 1.2 |
| beta | 4.5 |
| debt equity | 8.3 |
- ▸High short interest: 37%
- ▸High IV: 73%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (7)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.63
Upside
-9.5%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 66, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.65>1.3
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:7.3>=5.5. Top dim: Growth at 10.0; weakest: Risk (lower is worse) at 3.5. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 10.0, Catalyst at 7.5, and Momentum at 7.3; the weakest are Risk (lower is worse) at 3.5, Value at 3.7, and Peer rank at 4.2. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.63 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak Extreme Surprises
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters, indicating the analytical outperformance pattern has ended.
- P2Strong Revenue Growth Profile
Trip ifRevenue growth falls below 10% year-over-year in any single reported quarter, indicating the Sphere concept is not sustaining demand momentum.
- P3High Short Interest Target Exceeded
Trip ifShort interest rises above 45%, more than 9 percentage points above the current 36%, indicating that bearish professional conviction is intensifying.
- P4Exceptional Cash Conversion Quality
Trip ifFree cash flow falls below 150% of net income for 2 consecutive quarters, indicating the high-conversion thesis is not being sustained.