Will DreamWorks Animation’s Stock Continue to Be a Nightmare for Investors?

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E = Equity to Debt Ratio Is Strong

The debt-to-equity ratio for DreamWorks Animation is impressive. Surprisingly, it’s even more impressive than the debt-to-equity ratio for The Walt Disney Company (NYSE:DIS). Lions Gate Entertainment (NYSE:LGF) is in a world of hurt in this area. We’re including Lions Gate Entertainment for comparative purposes to a more traditional production company.

The balance sheet for DreamWorks Animation isn’t on the plus side, but it’s in decent shape. Once again, it’s in better shape than its competitors.

Debt-To-Equity

Cash

Long-Term Debt

DWA

.14

$130.70 Million

$200 Million

LGF

9.79

$61.03 Million

$1.09 Billion

DIS

.34

$3.39 Billion

$14.31 Billion

 

T = Technicals on the Stock Chart Are Poor

Without any big hits over the past few years, DreamWorks Animation’s stock price has suffered. It has been left in the dust by Lions Gate and Disney.

1 Month

Year-To-Date

1 Year

3 Year

DWA

-21.02%

1.24%

-6.61%

-56.79%

LGF

.68%

86.24%

79.34%

157.80%

DIS

-2.85%

30.75%

35.36%

65.30%

 

At $16.80, DreamWorks Animation is currently trading significantly lower than all its averages, including its 50-day SMA of $19.32, its 100-day SMA of $18.71, and its 200-day SMA of $18.35.

 E = Earnings and Revenue Are Inconsistent

Revenue and earnings for DreamWorks Animation have been very inconsistent over the past five years. While revenue has been relatively stagnant over that stretch, earnings have been on a decline.

2007

2008

2009

2010

2011

Revenue ($)in millions

767.18

650.05

725.18

784.79

706.02

Diluted EPS ($)

2.17

1.57

1.73

1.96

1.02

 

Quarterly revenue and earnings have also been inconsistent, but Q3 YoY saw a modest improvement in both areas.

9/2011

12/2011

3/2012

6/2012

9/2012

Revenue ($)in millions

160.76

218.97

136.08

162.80

186.30

Diluted EPS ($)

.23

.29

.11

.15

.29

 

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