Sphere Entertainment Co.

Where It Passes

Where It Falls Short

• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio1.17

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-6.3%

  ✗Buffett> 10%

  ROIC - WACC-16.3%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-12.5%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.55 -> 1.09

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.17

  ✗Dreman> 1.5

  Return on Invested Capital-7.6%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=-7.1%; FY2024: ROIC=unavailable; FY2025: ROIC=-5.9%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC-5.9% (RR=100% x ROIC=-5.9%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/4 years above 12% (latest -5.9%)

  ✗SleepROIC > 12% in a majority of years
• Valuation models0% pass✗ 3▾

  SPHR overvalued: all 3 models price fair value below $125.56 (median $13.84)

  Graham fair value$28.65

  ✗Graham-338.3% margin vs $125.56

  Marks fair value$7.95

  ✗Marks-1479.4% margin vs $125.56

  Templeton fair value$13.84

  ✗Templeton-807.2% margin vs $125.56
• Profitability6% pass✓ 4✗ 31▾

  15 of 16 flag SPHR's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)4/10 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)4/10 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-0.8%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-18.8% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-826.5M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)N/A (negative mean EPS)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)370.72

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR0.5%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE-7.3%

  ✗Lynch> 15%

  EBIT / Enterprise Value-5.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-5.5%, ROC=-12.5%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets0.79%

  ✓PiotroskiROA > 0

  ROA Change YoY

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=5.78%, ROA=0.79%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-21.0%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-7.3%

  ✗Dreman> 12%

  Margin of SafetyP/E=169.7x, P/B=2.5x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity4.2% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency4/8 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-19.4%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-7.3%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -33.2% -> -18.8%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-3.19%; #3692/6340 (top 58.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-7.34%; #3301/5226 (top 63.2%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0571; #2741/5884 (top 46.6%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-62.8% over 3 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years4/8 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation8% pass✓ 1✗ 27▾

  12 of 13 flag SPHR's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio2.5x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)370.72

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-5.5%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-5.5%, ROC=-12.5%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS169.7x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)23.4x

  ✗Dreman< 8x

  Price / Book Value per Share2.5x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=169.7x, OE Yield=6.5%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=169.7x

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=169.7x, P/B=2.5x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low461% of trailing low ($27.25)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-3.19%; #3692/6340 (top 58.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.4340; #3122/6449 (top 48.4%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS169.7x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E-0.37

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share3.05x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.3004; #3326/5247 (top 63.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-2.21%; #2941/6202 (top 47.4%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag SPHR's cash flow — Buffett, Lynch, Dreman +5 more

  Free Cash Flow Proxy$-826.5M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-615.4M

  ✗LynchPositive and growing

  Operating Cash Flow$243.3M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=5.78%, ROA=0.79%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)23.4x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=169.7x

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive0/5 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency6/8 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts20% pass✓ 3✗ 12▾

  Split decision: 11 FAIL · 3 PASS · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (0/9)✗LynchFAIL (1/7)✗GreenblattRank #2079✓PiotroskiPASS (F-Score 4)✗DremanFAIL (4/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (0/5)✗AckmanFAIL (3/9)✗TempletonFAIL (2/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage25% pass✓ 5✗ 10▾

  9 of 12 flag SPHR's debt & leverage — Graham, Buffett, Lynch +6 more

  Debt Levels0.39

  ✓MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  LT Debt vs Net Current AssetsLT Debt $708.8M vs NCA $116.2M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.37, IC: N/A

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.39

  ✗Lynch< 0.33

  Cash - Long-term Debt$-181.6M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change11.61% -> 18.23%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.17

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.39

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Interest Coverage & Debt/EBITDAIC=N/A (no interest expense), D/EBITDA=7.8x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.39

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.3887; #2225/4210 (top 52.9%)

  ✗AsnessTop 30% of eligible cross-section
• Growth25% pass✓ 6✗ 7▾

  6 of 8 flag SPHR's growth — Graham, Lynch, Marks +3 more

  EPS Growth (3-yr avg, 10-yr window)N/A (negative base EPS)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)370.72

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR0.5%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue Growth

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$0.29 (2017) -> $0.74 (2025)

  ✓DremanPositive over recent years

  EPS CAGR12.4% CAGR over 8 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency4/8 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth44.0%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency2/3 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -33.2% -> -18.8%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR13.5%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-62.8% over 3 years

  ✗Neff7%-20% annualized