Sphere Entertainment Co. (NYSE:SPHR) is among the 11 Best Entertainment Stocks to Buy According to Wall Street. Morgan Stanley Raises its Price Target on Sphere Entertainment Co. (SPHR) to $135 and Maintains an Overweight Rating On February 13, 2026, Morgan Stanley raised its price target on Sphere Entertainment Co. (NYSE:SPHR) to $135 from $105 and maintained an Overweight rating, citing stronger-than-expected results from The Wizard of Oz. The firm said the performance lifts its estimates for the Las V ...

In this article, we’ll look at 11 Best Entertainment Stocks to Buy According to Wall Street.Entertainment stocks are back in the conversation as investors look beyond the narrow list of sectors that defined much of the past two years. With earnings growth becoming more concentrated and multiples under closer scrutiny, areas tied to digital engagement, streaming, gaming, and media platforms are being reassessed through a profitability and margin lens. Communication services, the sector that houses many enter ...

Core Insights - Sphere Entertainment has demonstrated resilience and strong growth despite challenges in Las Vegas, with management aggressively scheduling multiple shows to enhance daily revenue [1][3] - The company reported significant success with The Wizard of Oz, selling over 2.2 million tickets and generating approximately $290 million in ticket sales, contributing to a revenue increase of over 60% in the Sphere segment [2][6][12] Financial Performance - Total company revenues for the December quarter reached $394.3 million, with adjusted operating income of $128 million [11] - Sphere segment revenues were $274.2 million, up more than 60% year-over-year, driven by higher revenues from The Wizard of Oz and increased performances [12] - Sphere segment adjusted operating income was $89.4 million, a significant improvement from an operating loss of approximately $0.8 million in the prior-year quarter [13] Cost Management and Liquidity - The company maintained disciplined cost management, reducing SG&A by $14.9 million year-over-year, with total SG&A at $104.1 million [15][16] - As of December 31, Sphere had approximately $56 million in net debt and $477 million in unrestricted cash, reflecting a solid liquidity position [4][17] Expansion Plans - Sphere is accelerating its expansion with a new 6,000-seat venue planned for National Harbor, supported by approximately $200 million in incentives, with a potential opening in four years or less [5][7] - The company is in the final stages of pre-construction for a venue in Abu Dhabi and is exploring 5-6 projects concurrently [9][10] Sponsorship and Advertising - Sphere has seen strong sponsorship momentum, with partnerships including Google, Delta, and Lenovo, and is actively expanding its roster of official partners [17] - The company hosted its second CES keynote and introduced an interactive game experience in collaboration with LEGO and Lucasfilm's Star Wars [17] Content Pipeline and Residency Outlook - The next Sphere Experience, From the Edge, is expected to be completed later this year, with potential launch timing in the fourth quarter or early next year [19] - The venue is nearly fully booked for concert residencies through 2026, focusing on long weekends to align with Las Vegas market patterns [21]

Market Expansion and Business Strategy - Sphere network is exploring selective market expansion through joint ventures, equity partnerships, managed venues, franchise models, sale-leaseback arrangements, and debt financing[37]. - The company launched a joint venture, GAME, with YES to enhance streaming services and launched the Gotham Sports streaming product in October 2024[55]. - The company no longer pursues the development of a Sphere in London and sold the land during the three months ended June 30, 2025[526]. Venue Features and Events - Sphere features a 580,000 square foot LED Exosphere, the world's largest LED screen, with approximately 1.2 million LED pucks capable of displaying over 1 billion colors[38]. - The main venue bowl includes a 160,000 square foot 16K x 16K LED screen, providing a fully immersive visual environment[38]. - Sphere Immersive Sound utilizes 167,000 programmable speakers to deliver high-quality audio throughout the venue[40]. - The Wizard of Oz, an immersive production at Sphere, debuted in August 2025 and has received critical acclaim for its technological innovation[40]. - Sphere has hosted major events, including the highest-grossing UFC event ever on September 14, 2024, and the Formula 1 Las Vegas Grand Prix in 2023, 2024, and 2025[43]. Subscriber and Streaming Services - MSG Networks has an average reach of approximately 2.9 million viewing subscribers as of November 2025, including subscribers to the MSG+ streaming service[50]. - MSG+ allows subscribers to access MSG Network and MSG Sportsnet content, with options for monthly, annual, and single game purchases[49]. - The company introduced its direct-to-consumer product, MSG+, in June 2023, providing an alternative for accessing its programming[89]. Competition and Market Challenges - The company faces intense competition in its Sphere business from various entertainment options, particularly in Las Vegas, which is a highly competitive market[83]. - MSG Networks competes for programming distribution against other networks and platforms, impacting its ability to attract subscribers and advertising revenue[85]. - The competitive landscape for sports programming is challenging, with increased availability of national sports programming potentially impacting MSG Networks' viewer base[93]. Employee and Organizational Culture - As of December 31, 2025, MSG Networks had approximately 1,100 full-time and 2,200 part-time employees, with 16% of employees under collective bargaining agreements[96][97]. - The company emphasizes a culture of accountability and continuous learning to support employee growth and development[98]. - MSG Networks offers a range of employee benefits, including medical, dental, vision plans, and a 401k plan with employer match, aimed at supporting employee well-being[99]. Regulatory and Compliance Issues - The California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) impose new data protection obligations, with most CPRA provisions effective from January 1, 2023[69]. - MSG Networks' international operations are subject to various laws, including the EU's GDPR, which affects data protection and privacy practices[71]. - MSG Networks must comply with FCC regulations regarding accessibility, including closed captioning for video programming and certain quality standards[73]. Financial and Economic Factors - Substantially all revenues and assets of the Company are attributed to or located in the United States, with a concentration in the New York City metropolitan area and Las Vegas[101]. - A hypothetical 200 basis point increase in floating interest rates would increase the Company's interest expense by $11,574[523]. - The EUR/USD exchange rate fluctuated from 1.0247 to 1.1868 during the year ended December 31, 2025, with a 10% fluctuation resulting in a change of $130 in the Company's net asset value[525]. - The GBP/USD exchange rate fluctuated from 1.2181 to 1.3749 during the year ended December 31, 2025, with a 10% fluctuation resulting in a change of $100 in the Company's net asset value[526]. - The weighted-average discount rates for the Company's Pension Plans and Postretirement Plan as of December 31, 2025, were 5.25% and 4.67%, respectively[530]. - A 25 basis point decrease in the assumed discount rates would increase projected benefit obligations for the Company's Pension Plans and Postretirement Plan by $800 and $20, respectively[530]. - The expected long-term rate of return on plan assets for the Company's funded pension plans was 6.36% for the year ended December 31, 2025[532]. - A 25 basis point decrease in the long-term return on pension plan assets assumption would increase net periodic pension benefit cost by $40 for the year ended December 31, 2025[533]. - The Company may enter into foreign currency forward exchange contracts to reduce translation risk from foreign currency fluctuations[527].

Financial Data and Key Metrics Changes - For the fourth quarter, the company reported total revenues of $394.3 million and adjusted operating income of $128 million [9] - The Sphere segment generated revenues of $274.2 million, an increase of over 60% compared to the prior year period, driven by higher revenues from the Sphere Experience [9] - Fourth quarter adjusted operating income for the Sphere segment was $89.4 million, compared to an adjusted operating loss of approximately $800,000 in the prior year quarter [10] Business Line Data and Key Metrics Changes - The Sphere Experience saw significant revenue growth due to The Wizard of Oz, with over 2.2 million tickets sold and approximately $290 million in ticket sales [8] - MSG Networks generated $120.1 million in revenues and $38.6 million in adjusted operating income, reflecting a decrease in subscribers and lower affiliate rates [11][12] Market Data and Key Metrics Changes - The company is expanding its presence with a new Sphere venue in National Harbor, Maryland, expected to attract over 15 million annual visitors [5] - The company is in discussions for additional Sphere venues in both domestic and international markets [7] Company Strategy and Development Direction - The company aims to create a global network of Sphere venues powered by proprietary technology and immersive content [5] - Continued investment in immersive technology and experiential content is a priority to maintain leadership in the market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model, citing strong ticket sales and positive discussions with IP holders for future projects [5][43] - The company anticipates a strong convention season next year, which will influence show scheduling and revenue growth [28] Other Important Information - The company has secured approximately $200 million in state, local, and private incentives for the National Harbor project, with plans to finalize agreements soon [6] - The company refinanced its credit facility related to Sphere in Las Vegas, extending the maturity and improving borrowing rates [12] Q&A Session Summary Question: How many Sphere expansion projects are expected in the next few years? - Management indicated they could handle 5 to 6 projects simultaneously, assuming they are profitable [15][16] Question: How was the location for National Harbor chosen? - The location was selected due to competitive offers from Virginia and Maryland, which expedited the decision-making process [20][21] Question: How are ticket sales for The Wizard of Oz trending? - Despite seasonal headwinds, ticket sales have been strong, and the company is confident in continued growth [26][28] Question: What is the outlook for SG&A expenses in 2026? - Management is focused on cost-saving opportunities while ensuring infrastructure supports growth, with fluctuations expected in SG&A expenses [31][32] Question: What is the status of the residency pipeline through 2027? - The company is nearly fully booked for 2026 and has limited availability for 2027, focusing on long weekends to maximize attendance [46][47] Question: Can you provide an update on the sponsorship strategy? - The company has secured partnerships with brands like Delta and Anheuser-Busch and is actively pursuing additional sponsorship opportunities [52][55]

Financial Data and Key Metrics Changes - For the fourth quarter, the company reported total revenues of $394.3 million and adjusted operating income of $128 million [9] - The Sphere segment generated revenues of $274.2 million, an increase of over 60% compared to the prior year period, driven by higher revenues from the Sphere Experience [9] - Fourth quarter adjusted operating income for the Sphere segment was $89.4 million, compared to an adjusted operating loss of approximately $800,000 in the prior year quarter [10] Business Line Data and Key Metrics Changes - The Sphere Experience saw significant revenue growth due to The Wizard of Oz, with over 2.2 million tickets sold and approximately $290 million in ticket sales [8] - MSG Networks generated $120.1 million in revenues and $38.6 million in adjusted operating income, reflecting a decrease in subscribers and lower affiliate rates [11][12] Market Data and Key Metrics Changes - The company is expanding its Sphere venues, with a new 6,000-seat Sphere planned for National Harbor, Maryland, expected to open in four years or less [5][6] - The company is in discussions for additional Sphere projects in both domestic and international markets [7] Company Strategy and Development Direction - The company aims to create a global network of Sphere venues powered by proprietary technology and immersive content [5] - Continued investment in immersive technology and experiential content is a priority to maintain leadership in the market [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model, citing strong ticket sales and positive discussions with IP holders for future projects [8][44] - The company anticipates a strong convention season next year, which will influence show scheduling and revenue growth [28] Other Important Information - The company has refinanced its credit facility related to Sphere in Las Vegas, extending the maturity for a new five-year term [12] - The company is focused on managing SG&A expenses efficiently while supporting growth initiatives [32] Q&A Session Summary Question: How many sphere expansion projects are expected in the next few years? - Management indicated they could handle 5 to 6 projects simultaneously, assuming they are profitable [15][16] Question: Have elevated construction costs impacted conversations with potential partners? - Management stated that the investment model remains viable despite increased costs, and they are exploring new construction methods to lower expenses [17] Question: Can you provide more details on the National Harbor location selection? - The location was chosen due to competitive offers and a favorable site, which expedited the decision-making process [21] Question: How are ticket sales for The Wizard of Oz trending during the winter? - Management noted strong growth despite seasonal headwinds and is confident in future demand [28] Question: What is the outlook for SG&A expenses in 2026? - Management is focused on cost-saving opportunities while ensuring infrastructure supports growth, with fluctuations expected due to non-recurring expenses [32] Question: What is the status of the residency pipeline through 2027? - The company is nearly fully booked for 2026 and has limited availability in 2027, focusing on long weekends to maximize attendance [48] Question: Can you update on the sponsorship strategy and Exosphere progress? - The company is seeing strong growth in sponsorships and has debuted interactive experiences, with plans for more announcements throughout the year [56][57]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported total revenues of $394.3 million and adjusted operating income of $128 million [8] - The Sphere segment generated revenues of $274.2 million, an increase of over 60% compared to the prior year period, driven by higher revenues from the Sphere Experience [8] - Adjusted operating income for the Sphere segment was $89.4 million, compared to an adjusted operating loss of approximately $800,000 in the prior year quarter [9] Business Line Data and Key Metrics Changes - The Sphere Experience saw significant revenue growth due to The Wizard of Oz, with over 2.2 million tickets sold and approximately $290 million in ticket sales [6] - MSG Networks generated $120.1 million in revenues and $38.6 million in adjusted operating income, reflecting a decrease in subscribers and lower affiliate rates [10][11] Market Data and Key Metrics Changes - The company is expanding its presence with a new Sphere venue in National Harbor, Maryland, expected to attract over 15 million annual visitors [4] - The company is in discussions for additional Sphere projects in both domestic and international markets [5] Company Strategy and Development Direction - The company aims to create a global network of Sphere venues powered by proprietary technology and immersive content [4] - Continued investment in immersive technology and experiential content is planned to maintain Sphere's leadership position [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and the potential for substantial long-term growth, particularly with the expansion of Sphere venues [6] - The company is optimistic about ticket sales and demand for The Wizard of Oz, even during traditionally weaker periods in Las Vegas [28] Other Important Information - The company has refinanced its credit facility related to Sphere in Las Vegas, extending the maturity for a new five-year term and improving the borrowing rate [11] - The company is actively pursuing partnerships with various brands for sponsorship opportunities, including recent deals with Delta and Anheuser-Busch [56] Q&A Session Summary Question: How many sphere expansion projects are expected in the next few years? - Management indicated they could handle 5 to 6 projects simultaneously, assuming they are profitable [14][15] Question: Have elevated construction costs impacted conversations with potential partners? - Management stated that the business model still supports the investment level, and they are exploring new construction methods to lower costs [16] Question: Can you provide more details on the National Harbor location selection? - The location was chosen due to a competitive offer and favorable dynamics in the area [20] Question: How are ticket sales for The Wizard of Oz trending? - Management noted strong growth despite seasonal headwinds and is confident in future demand [28] Question: What is the outlook for SG&A expenses in 2026? - Management emphasized a focus on cost-saving opportunities while ensuring infrastructure supports growth [31] Question: Can you provide an update on the residency pipeline through 2027? - The company is nearly fully booked for 2026 and is focused on long weekends to maximize attendance [47] Question: What is the status of the sponsorship strategy and Exosphere progress? - The company reported strong growth in sponsorships and debuted an interactive game experience, indicating positive momentum [56]

分组1 - Sphere Entertainment reported quarterly earnings of $1.23 per share, significantly beating the Zacks Consensus Estimate of a loss of $0.12 per share, and showing an improvement from a loss of $3.49 per share a year ago, resulting in an earnings surprise of +1,169.57% [1] - The company achieved revenues of $394.28 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.68%, and compared to year-ago revenues of $308.29 million, indicating consistent revenue growth [2] - Sphere Entertainment has surpassed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times in the same period [2] 分组2 - The stock has underperformed the market with a loss of about 0.3% since the beginning of the year, while the S&P 500 has gained 1.4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.47 on revenues of $351.13 million, and for the current fiscal year, it is -$3.41 on revenues of $1.33 billion [7] 分组3 - The Zacks Industry Rank indicates that the Media Conglomerates sector is currently in the bottom 43% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6] - The estimate revisions trend for Sphere Entertainment was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6]

Exhibit 99.1 SPHERE ENTERTAINMENT CO. REPORTS FOURTH QUARTER AND FULL YEAR 2025 RESULTS NEW YORK, N.Y., February 12, 2026 - Sphere Entertainment Co. (NYSE: SPHR) ("Sphere Entertainment" or the "Company") today reported financial results for the fourth quarter and full-year ended December 31, 2025. Recent highlights for the Company's Sphere segment include: For the twelve months ended December 31, 2025, the Company reported revenues of $1,220.0 million, an increase of $89.1 million, or 8%, as compared to the ...

Core Insights - Sphere Entertainment Co. reported strong financial results for Q4 and full year 2025, with significant revenue growth and improved operating income, indicating a positive trajectory for the company's business model [1][2]. Financial Performance - For Q4 2025, the company achieved revenues of $394.3 million, an increase of $86.0 million or 28% compared to Q4 2024 [1]. - The operating income for Q4 2025 was $28.9 million, an improvement of $171.9 million from a loss of $142.9 million in Q4 2024 [1][2]. - Adjusted operating income for Q4 2025 reached $128.0 million, up $95.2 million from $32.9 million in Q4 2024, reflecting a 289% increase [1][2]. - For the full year 2025, total revenues were $1,220.0 million, an increase of $89.1 million or 8% from 2024 [1]. - The company reported an operating loss of $229.6 million for the full year, but this was an improvement of $142.8 million or 38% compared to the previous year [1][2]. Segment Performance - The Sphere segment generated revenues of $274.2 million in Q4 2025, a 62% increase from $169.0 million in Q4 2024, driven by the success of "The Wizard of Oz" experience [1][2]. - MSG Networks reported revenues of $120.1 million in Q4 2025, a decrease of $19.2 million or 14% compared to the prior year, primarily due to a 14.5% drop in total subscribers [2][4]. - The Sphere segment's direct operating expenses increased by 27% to $92.6 million in Q4 2025, attributed to higher costs associated with performances [1][2]. Strategic Developments - The company announced plans to develop a new Sphere venue at National Harbor, Maryland, which will be the second in the U.S. and the first to utilize a smaller-scale design model [1][5]. - Sphere Entertainment continues to expand its global footprint, with plans to bring Sphere to Abu Dhabi [1][2]. Sponsorship and Partnerships - The company secured multi-year sponsorship and advertising partnerships with major brands such as Anheuser-Busch and Delta Air Lines [1][2]. - The debut of a live interactive game experience on the Exosphere in collaboration with LEGO Group and Lucasfilm's Star Wars was also highlighted [1].