Comparing Kartoon Studios (NASDAQ:TOON) and Lionsgate Entertainment (NYSE:LION)

Lionsgate Entertainment (NYSE:LION) and Kartoon Studios (NASDAQ:TOON) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations for Lionsgate Entertainment and Kartoon Studios, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lionsgate Entertainment	0	3	4	1	2.75
Kartoon Studios	0	0	0	0	0.00

Lionsgate Entertainment presently has a consensus price target of $8.86, suggesting a potential upside of 39.48%. Given Lionsgate Entertainment’s stronger consensus rating and higher possible upside, analysts clearly believe Lionsgate Entertainment is more favorable than Kartoon Studios.

Valuation and Earnings

This table compares Lionsgate Entertainment and Kartoon Studios”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lionsgate Entertainment	$4.02 billion	0.46	-$1.11 billion	($0.43)	-14.77
Kartoon Studios	$36.02 million	1.05	-$77.10 million	($0.48)	-1.65

Kartoon Studios has lower revenue, but higher earnings than Lionsgate Entertainment. Lionsgate Entertainment is trading at a lower price-to-earnings ratio than Kartoon Studios, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Lionsgate Entertainment has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Kartoon Studios has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500.

Profitability

This table compares Lionsgate Entertainment and Kartoon Studios’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lionsgate Entertainment	-7.34%	-57.26%	-0.12%
Kartoon Studios	-114.48%	-78.36%	-38.43%

Insider & Institutional Ownership

34.0% of Lionsgate Entertainment shares are owned by institutional investors. Comparatively, 8.6% of Kartoon Studios shares are owned by institutional investors. 9.4% of Lionsgate Entertainment shares are owned by insiders. Comparatively, 6.4% of Kartoon Studios shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Lionsgate Entertainment beats Kartoon Studios on 11 of the 15 factors compared between the two stocks.

About Lionsgate Entertainment

Lionsgate Studios Corp. engages in the provision of motion picture and studio operations that bring a varied portfolio of entertainment to consumers. The company is headquartered in Santa Monica, CA.

About Kartoon Studios

Kartoon Studios Inc., a content and brand management company, creates, produces, licenses, and broadcasts educational and multimedia animated content for children worldwide. The company offers Shaq’s Garage, a children’s animated series about the secret adventures; Cocomelon that provides 3D animation videos of traditional nursery rhymes and children’s songs; Eggventurers, a preschool animated series; Barbie Productions that provides animated Barbie series; Octonauts, a children’s television series based on the children’s books; Roblox Rumble, an elimination-style competitive reality series; and Spin Master Productions. It also operates a kartoon channel network and channel frederator network, as well as distributes subscription video on demand services for kids. In addition, the company acts as a licensing agent for Llama Llama, Bee & PuppyCat, and Castlevania. It serves various customers and partners, including broadcasters, consumer products licensees, and online platforms. The company was formerly known as Genius Brands International, Inc. and changed its name to Kartoon Studios Inc. in June 2023. Kartoon Studios Inc. was incorporated in 2006 and is headquartered in Beverly Hills, California.