As of May 31, 2025, Madison Square Garden Sports Corp has a Discounted Cash Flow (DCF) derived fair value of $163.13 per share. With the current market price at $189.89, this represents a potential upside of -14.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $117.35 |
| DCF Fair Value (10-year) | $163.13 |
| Potential Upside (5-year) | -38.2% |
| Potential Upside (10-year) | -14.1% |
| Discount Rate (WACC) | 6.5% - 8.6% |
Revenue is projected to grow from $1027 million in 06-2024 to $1514 million by 06-2034, representing a compound annual growth rate of approximately 4.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 06-2024 | 1027 | 16% |
| 06-2025 | 991 | -3% |
| 06-2026 | 1063 | 7% |
| 06-2027 | 1104 | 4% |
| 06-2028 | 1139 | 3% |
| 06-2029 | 1207 | 6% |
| 06-2030 | 1231 | 2% |
| 06-2031 | 1262 | 3% |
| 06-2032 | 1356 | 7% |
| 06-2033 | 1478 | 9% |
| 06-2034 | 1514 | 2% |
Net profit margin is expected to improve from 6% in 06-2024 to 14% by 06-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 06-2024 | 59 | 6% |
| 06-2025 | 71 | 7% |
| 06-2026 | 92 | 9% |
| 06-2027 | 110 | 10% |
| 06-2028 | 128 | 11% |
| 06-2029 | 150 | 12% |
| 06-2030 | 156 | 13% |
| 06-2031 | 163 | 13% |
| 06-2032 | 178 | 13% |
| 06-2033 | 197 | 13% |
| 06-2034 | 205 | 14% |
with a 5-year average of $74 million. Projected CapEx is expected to maintain at approximately 12% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 06-2025 | 26 |
| 06-2026 | 51 |
| 06-2027 | 78 |
| 06-2028 | 105 |
| 06-2029 | 134 |
| 06-2030 | 140 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 23 |
| Days Inventory | 0 |
| Days Payables | 8 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2025 | 46 | 14 | 30 | 3 | (2) |
| 2026 | 246 | 73 | 129 | 1 | 42 |
| 2027 | 307 | 88 | 135 | (1) | 85 |
| 2028 | 367 | 102 | 139 | 6 | 121 |
| 2029 | 438 | 120 | 147 | 3 | 169 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 117.35 | -38.2% |
| 10-Year DCF (Growth) | 163.13 | -14.1% |
| 5-Year DCF (EBITDA) | 186.68 | -1.7% |
| 10-Year DCF (EBITDA) | 216.93 | 14.2% |
Is Madison Square Garden Sports Corp (MSGS) a buy or a sell? Madison Square Garden Sports Corp is definitely a sell. Based on our DCF analysis, Madison Square Garden Sports Corp (MSGS) appears to be overvalued with upside potential of -14.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $189.89.