In this article, we will look at the 10 Best Entertainment Stocks To Buy According to Analysts.
An Overview of the Entertainment Industry
According to a report by The Business Research Company, the international entertainment and media industry was valued at $2.51 trillion in 2023. It is expected to grow at a compound annual growth rate (CAGR) of 7% to reach $3.55 trillion by 2028. Growth in the entertainment industry is driven by the rapid adoption of subscription models, the evolution of live events, and the use of augmented and virtual reality technologies.
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A report published by FTI Delta earlier this year highlighted some significant trends and challenges in the media and entertainment industry. As per the report, the live entertainment sector has experienced a robust recovery, with global spending on live music in 2023 increasing by 49% compared to 2019. Major sports leagues, including the NFL, NBA, MLS, NHL, and IndyCar, have not only recovered but surpassed pre-pandemic attendance levels. The post-pandemic recovery within the industry has not been uniform. For instance, the filmed entertainment industry faced severe challenges in late 2023 due to strikes by the Writers Guild of America (WGA) and SAG-AFTRA. These disruptions led to a more than 70% decline in production and marketing expenditures, compounding existing issues from early 2023 when studios were already tightening budgets. As a result, spending in 2023 was down approximately 35% from 2022, reflecting a struggling market. The report anticipates recovery for filmed entertainment post-strike to be more subdued than previous rebounds, with projections of about 25% year-over-year growth in 2024.
On the bright side, the report highlighted a significant growth trajectory for United States TV and connected TV (CTV) advertising, emphasizing the transformative impact of CTV on the advertising landscape. The combined US TV and CTV ad spending is projected to approach $100 billion by 2027, with CTV being the primary driver of this growth. In 2024 alone, CTV advertising is expected to increase by $5.5 billion, representing a 22% year-over-year growth. The surge in CTV advertising is largely attributed to the rise of premium ad-supported streaming services.
In addition to a robust performance expected within the advertising segment, the gaming sector remains resilient. The video game industry achieved a CAGR of 9.2% from 2019 to 2022. Despite a 6.3% decline from the peak surge during the COVID-19 pandemic, console sales in 2022 remained 18% higher than pre-pandemic levels, indicating strong ongoing demand for gaming hardware. As per the report, the overall outlook for the video game market remains positive, with expectations of above mid-single-digit growth throughout the next year.
Now that we have discussed some of the emerging trends in the media and entertainment industry, let’s take a look at the 10 best entertainment stocks to buy according to analysts.
Photo by Kosta Bratsos on Unsplash
Our Methodology
To compile the list of the 10 best entertainment stocks to buy according to analysts, we used the Finviz stock screener and our previous articles. Using these two sources we aggregated an initial list of entertainment stocks sorted by their market capitalization. Next, we checked analysts’ upside potential for each stock and shortlisted stocks with an analyst upside potential of at least 25%. Lastly, we ranked our stocks in ascending order of the analysts’ upside potential. We have also added the number of hedge funds holding each stock sourced from Insider Monkey’s Q3 2024 database. Please note that the data was collected on December 13, 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Entertainment Stocks To Buy According to Analysts
10. Liberty Media Corporation (NASDAQ:FWONK)
Analysts’ Upside Potential: 26.21%
Number of Hedge Funds: 37
Liberty Media Corporation (NASDAQ:FWONK) operates primarily through its Formula One (F1) group, which focuses on motorsports and entertainment. Formula One is a major global motorsport organization responsible for the commercial rights to the Formula One World Championship. This championship is an annual series of motor races held over about nine months.
During the fiscal third quarter results of 2024, management noted that the current F1 season is highly competitive, with both constructors’ and drivers’ championships nearing their conclusion. Financially, F1 has performed well, with revenues up by 15% and adjusted operating income before depreciation and amortization (OIBDA) up by 21% year-to-date. The increase in revenue is attributed to two additional races this season, new partnerships, and improvements in F1 TV and hospitality services. Notably, management also signed new commercial agreements with companies like LVMH and American Express to expand global sponsorships and market presence.
Liberty Media Corporation (NASDAQ:FWONK) has undertaken refinancing efforts for F1’s Term Loan B, reducing interest margins and extending loan maturities to improve financial flexibility. A significant portion of F1’s debt is now at fixed rates, providing stability against interest rate fluctuations. The refinancing also included securing funds for acquiring MotoGP, indicating the company’s strategic expansion within motorsports. It is one of the best entertainment stocks to buy according to analysts.
9. Sphere Entertainment Co. (NYSE:SPHR)
Analysts’ Upside Potential: 28.27%
Number of Hedge Funds: NA
Sphere Entertainment Co. (NYSE:SPHR) is a company focused on live entertainment and media, primarily operating in two main areas Sphere and MSG Networks. Sphere is a cutting-edge entertainment venue that uses advanced technology to create immersive experiences for audiences. The company opened its first Sphere venue in Las Vegas in September 2023. On the other hand, MSG Networks operates two regional sports networks, MSG Network and MSG Sportsnet, along with a streaming service called MSG+.
Sphere Entertainment Co. (NYSE:SPHR) is actively pursuing a global expansion strategy for its innovative entertainment venues. In October 2024, management announced plans to build its second venue in Abu Dhabi, following the successful launch of the first Sphere in Las Vegas. This new venue is expected to match the scale of the Las Vegas Sphere, accommodating around 20,000 guests.
The company reported a year-over-year revenue increase of $109.9 million to reach $227.9 million in its first fiscal quarter of 2025. The revenue growth was driven by strong consumer demand for events and original productions like VU2 and Postcards from Earth. However, the company also faced operating losses, indicating that while revenues are rising, expenses are significant as well. Management has been working on expanding its library of experiential content and on new productions set to debut in 2025. It aims to host diverse events simultaneously, enhancing its operational model to maximize revenue while improving guest experiences.
To achieve this management has begun forming partnerships with major corporations for events and sponsorships, such as collaborations with Hewlett-Packard and Delta Airlines. These partnerships are expected to enhance marketing efforts and broaden Sphere’s reach. It is one of the best entertainment stocks to buy according to analysts.
Ariel Fund stated the following regarding Sphere Entertainment Co. (NYSE:SPHR) in its Q2 2024 investor letter:
“By comparison, shares of live entertainment, media and technology company, Sphere Entertainment Co. (NYSE:SPHR) traded down on mixed earnings results, giving back some of its strong first quarter gains. Although residency demand is robust and the venues’ original content experience and Exosphere remain popular, some investors expect near-term utilization will slow due to Las Vegas seasonality. Meanwhile, international expansion remains the company’s priority, with management suggesting a major announcement soon. Although we believe it will take time for Sphere to reach its full potential, the company is well on its way to having events 365 days a year. It is ramping up the scale of its concert residencies, securing marquee sporting and corporate events, and creating more original content for The Sphere Experience. In our view, the new experiential immersive venue in Las Vegas and its potential franchise opportunities alongside the company’s two regional sports and entertainment networks present a long-term opportunity that remains meaningfully underappreciated at current trading levels.”
8. DraftKings Inc. (NASDAQ:DKNG)
Analysts’ Upside Potential: 32.90%
Number of Hedge Funds: 54
DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming company that offers various online services. It is known for its Sportsbook and Daily Fantasy Sports platforms. Using the Sportsbook, users can place bets on the outcomes of sporting events through its mobile app and website. Whereas, the Daily Fantasy Sports platform allows users to create fantasy teams made up of real players from various sports leagues and compete based on the performance of actual players.
The company has been growing its unique customer count on its platforms while maintaining the Customer Acquisition Cost (CAC). Its newly acquired customers on sportsbook and iGaming platforms increased 14% year-over-year, with CAC improving 20% during the same time. As a result, the online sportsbook handle and gross gaming revenue increased 25% and 39% year-over-year, respectively.
Moreover, DraftKings Inc. (NASDAQ:DKNG) has been busy improving its customer engagement. This fall, management launched new and exclusive NBA betting markets aimed at engaging customers with significant game storylines. This initiative is designed to attract more users by making betting more relevant to the ongoing narratives in the league. In addition, it has also expanded its in-house Same Game Parlay feature, adding over 50 new NBA markets. Management also has plans to launch its sportsbook product in Missouri, where sports betting has recently been legalized. Missouri represents about 2% of the U.S. population, providing a substantial opportunity for growth.
Alger Spectra Fund stated the following regarding DraftKings Inc. (NASDAQ:DKNG) in its Q2 2024 investor letter:
“DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming firm designed to ignite the passion of sports enthusiasts through a diverse offering that spans daily fantasy, regulated gaming, and digital media. We believe the company’s expertise in product development and customer acquisition, which established it as the market leader in daily fantasy sports (DFS), positions DraftKings to be a key driver in advancing the U.S. sports betting market’s growth. The company reported strong fiscal first quarter results, with revenues beating analyst estimates due to broad-based momentum in customer engagement and acquisition. However, on May 28th, the Illinois Senate passed a new state budget that includes a tiered progressive tax on sportsbook operators, effective July 1, 2024. This new tax ranges from 20% to 40% on gross revenues, a significant increase from the current 15% tax rate. Despite management’s belief that it can mitigate the tax impact by reducing promotions in Illinois, this development negatively affected the company’s share price.”
7. Codere Online Luxembourg, S.A. (NASDAQ:CDRO)
Analysts’ Upside Potential: 36.68%
Number of Hedge Funds: 5
Codere Online Luxembourg, S.A. (NASDAQ:CDRO) is one of the best entertainment stocks to buy according to analysts. It provides online casino and betting services through its website and mobile-based application. The company serves in core markets including Spain, Mexico, Colombia, Argentina, and Panama.
Codere Online Luxembourg, S.A. (NASDAQ:CDRO) has been successful in increasing its user base. During the fiscal third quarter of 2024, its monthly active users improved 15% year-over-year to reach around 143,000. Moreover, it also benefited from an increased average spending per customer, which improved by 4% to reach €120 (around $126). As a result, it was able to grow its net gaming revenue by 20%, reaching €51.7 million ($54.26 million).
The company’s business remained strong across all core markets. Its core markets are categorized as Spain, Mexico, and others. Net gaming revenue in Spain and Mexico grew by 10.6% and 27.1%, respectively. While all other markets grew by a consolidated 24.2% growth rate year-over-year. Management expects to end the fiscal year with its revenue close to the top end of its €205 million to €215 million ($215 million and $226 million) guideline.
6. Gaia, Inc. (NASDAQ:GAIA)
Analysts’ Upside Potential: 38.89%
Number of Hedge Funds: 4
Gaia, Inc. (NASDAQ:GAIA) is a media entertainment and community company that operates a global video streaming service. It focuses on providing content related to personal growth, wellness, and alternative healing. The company serves members in approximately 185 countries and offers content in multiple languages, including English, Spanish, French, and German.
During its fiscal third quarter 2024 earnings call management announced a partnership with ElevenLabs, who will be Gaia, Inc.’s (NASDAQ:GAIA) official AI partner to provide dubbing and translation services across various languages. Management sees this as an opportunity to boost its engagement internationally. The company is already growing its user base substantially as members count increased 7% year-over-year during the third quarter to reach 846,000.
The increased member count topped with an increase of $2 in subscription fees for all members led its revenue to grow 10% year-over-year. Gaia, Inc. (NASDAQ:GAIA) generated $22.2 million in revenue and also marked the sixth consecutive quarter of positive operating and free cash flow. Management remains confident of an even better next quarter due to the increased subscription fees. It expects that even if its customer base remains flat the fourth quarter revenue can hit at least $24 million.
Artko Capital stated the following regarding Gaia, Inc. (NASDAQ:GAIA) in its fourth quarter 2023 investor letter:
“As discussed in our 2Q23 Partner Letter, we sold the remainder of our original 8-year-old position in Gaia, Inc. (NASDAQ:GAIA). While we still made substantial returns in our initial investment, with multiple position reduction sales above $10.00, in recent years, the position has been a significant detractor from performance. The expected fundamentals did not materialize, and key management departures led us to deploy the capital into other positions.”
5. MGM Resorts International (NYSE:MGM)
Analysts’ Upside Potential: 40.69%
Number of Hedge Funds: 46
MGM Resorts International (NYSE:MGM) is one of the largest casino entertainment and hospitality companies. It operates around 18 properties in the United States and Macau, with significant development underway in Japan and Dubai. The company functions through Las Vegas Strip Resorts, Regional Operations, and MGM China. Its properties have gaming, hotels, dining, conventions, entertainment, retail, and other facilities.
The Las Vegas Strip is one of the most prominent gambling and casino locations. According to the Nevada Control Board, the Las Vegas Gross Gaming Revenue (GGR) has grown more than 4 times over the past 30 years. MGM Resorts International (NYSE:MGM) has benefited significantly from its operations at this location with its adjusted property EBTIDAR from Las Vegas growing 94% between 2019 and 2023. Considering the encouraging results, management on October 21 announced an agreement with Marriott International to launch W Las Vegas, which will be a new hotel on the Las Vegas Strip. W Las Vegas will be the 12th property included in the MGM Collection with Marriott Bonvoy, which allows Marriott’s vast member base to enjoy benefits at MGM Resorts locations.
Financially speaking, MGM Resorts International (NYSE:MGM) reported record consolidated net revenues for the third quarter of 2024, with significant contributions from its operations in MGM China. The consolidated net revenue of the company was $4.2 billion, an increase of 5% compared to the same quarter last year. MGM China grew its revenue by 14% to $929 million. The segment was positively affected by the lifting of COVID-19-related travel restrictions.
Meridian Hedged Equity Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its Q3 2024 investor letter:
“MGM Resorts International (NYSE:MGM) is a global hospitality and entertainment company with a portfolio of destination casino resorts, primarily in Las Vegas, regional U.S. markets, and Macau. While MGM reported better-than-expected operating results in the quarter, driven by strength in both Las Vegas and Macau, its share price has been under pressure due to two main factors. First, BetMGM’s performance has lagged expectations, with ongoing losses and increased competition affecting investor sentiment toward the online gaming sector. Second, and perhaps of more immediate concern to the market, were management’s comments about softening early demand trends for the upcoming Formula One race in Las Vegas, raising concerns about potential weakness in the fourth quarter. While these factors contributed to volatility, we view them as likely short-term headwinds that do not materially impact our long-term investment thesis. As a result, we held our position steady in the period. We believe the company’s underlying fundamentals remain strong, and its assets provide an attractive fundamental floor value.”
4. Caesars Entertainment, Inc. (NASDAQ:CZR)
Analysts’ Upside Potential: 41.85%
Number of Hedge Funds: 67
Caesars Entertainment, Inc. (NASDAQ:CZR) is a major company in the casino and entertainment industry in the United States. It owns and operates over 50 casinos across the United States, primarily under well-known brands like Caesars, Harrah’s, and Horseshoe. The company runs hotels connected to its casinos, providing approximately 44,900 hotel rooms. It also hosts numerous live events such as concerts and shows at its properties, enhancing the overall guest experience beyond just gaming.
In the third quarter of 2024, Caesars Digital, the online gaming and sports betting division of Caesars Entertainment, Inc. (NASDAQ:CZR), showcased growth and performance. The segment reported $303 million in net revenues, marking a 41% increase compared to the same quarter last year. This reflects a strong demand for digital gaming and sports betting services. The segment also achieved a record adjusted EBITDA of $52 million, a significant rise from just $2 million in Q3 2023.
Moreover, within the digital segment, the Caesars Palace app has been growing as a key contributor to overall iCasino revenues, highlighting the effectiveness of its mobile strategy. Caesars Entertainment, Inc. (NASDAQ:CZR) has launched the Horseshoe Casino brand in multiple states including Michigan, Pennsylvania, and West Virginia, with plans to expand into Ontario and New Jersey by year-end. It is one of the best entertainment stocks according to analysts.
Choice Equities Capital Management stated the following regarding Caesars Entertainment, Inc. (NASDAQ:CZR) in its Q3 2024 investor letter:
“Caesars Entertainment, Inc. (NASDAQ:CZR) and GENI – Both Caesars Entertainment, Inc. and Genius Sports Limited operate in and around the entertainment, casino and gaming space. Caesars is a bit more well-known and discussed in brief below. Caesars Entertainment is the owner of a strong casino and entertainment brand, with a diverse portfolio of properties strategically focused on both physical and digital growth. The company’s leadership in the U.S. casino and resort industry is underpinned by its expansive footprint, including marquee properties on the Las Vegas strip, new and existing regional casinos in growing markets, and its growing Caesars Sportsbook platform. With the ongoing recovery in leisure and travel post-pandemic, combined with the secular tailwinds in online sports betting and iGaming, Caesars is well-positioned to capture growth across multiple segments. Recently emerging from a sizeable multi-year investment cycle, shares of Caesars look attractive on a mid-teens yield of forward cash-flows. Some recent refinancings and a share buyback highlight the improved look of the company’s financials.”
3. Reservoir Media, Inc. (NASDAQ:RSVR)
Analysts’ Upside Potential: 43.65%
Number of Hedge Funds: 12
Reservoir Media, Inc. (NASDAQ:RSVR) is an independent music company that operates primarily in two main areas, music publishing and recorded music. They acquire rights to music catalogs, which allows them to earn money from royalties whenever those songs are used or performed. On the other hand, the recorded music segment focuses on acquiring sound recording catalogs and discovering new artists. The company also works on marketing, distributing, and selling these recordings.
The fiscal second quarter of 2025 came in with several strategic achievements for the company. Reservoir Media, Inc. (NASDAQ:RSVR) signed a publishing deal with rap icon Snoop Dogg, allowing it to publish his entire catalog and that of his label, Death Row Records. Moreover, the company also acquired the producer rights of legendary producer Jack Douglas, known for his work with Aerosmith and Cheap Trick, as well as publishing rights to songs by the late songwriter Billy Strange, including hits associated with Elvis Presley.
During the quarter the company generated $40.7 million in revenue, marking a 6% increase compared to the same period last year. This growth was largely driven by the strength of its Music Publishing segment, which saw a 10% rise in revenue. In addition, management also noted a significant increase in operating income with a 65% rise year-over-year, to $10.1 million. It is one of the best entertainment stocks to buy according to analysts.
2. Inspired Entertainment, Inc. (NASDAQ:INSE)
Analysts’ Upside Potential: 51.68%
Number of Hedge Funds: 16
Inspired Entertainment, Inc. (NASDAQ:INSE) operates as a technology provider for various gaming-related products and services to other businesses. Their software and games allow businesses to provide sports betting options. The company has a global reach in over 35 countries with more than 50,000 gaming machines installed internationally.
Management has strategically expanded its operations to the UK, North America, and mainland Europe. They have also formed strategic partnerships with companies like FanDuel and Loto-Québec. This resulted in the company’s Interactive segment standout as a performer with revenue growing by 40% year-over-year and EBITDA increasing by 47%. Inspired Entertainment, Inc. (NASDAQ:INSE) is actively pursuing its strategic priorities, which include expanding digital businesses, optimizing land-based operations, and investing in new markets. Recent initiatives include launching the MGM Bonus City game in Michigan and developing Hybrid Dealer content for FanDuel.
Overall, the company posted net revenue of $78.0 million, largely driven by its Interactive segment. Management remains confident in sustainably driving its growth on the back of improved profitability within its Gaming segment and record sales coming from its Interactive segment. It is one of the best entertainment stocks to buy according to analysts.
1. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY)
Analysts’ Upside Potential: 56.48%
Number of Hedge Funds: 28
Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) operates entertainment and dining venues across North America. They combine restaurants and arcades in one place, allowing guests to enjoy meals while playing games. The company has around 223 venues, including about 164 Dave & Buster’s locations in the US, Puerto Rico, and Canada, as well as, 59 Main Event venues that offer additional activities like bowling and laser tag.
During the latest quarter, Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) made notable advancements toward its long-term strategic objectives, despite facing some challenges. Management opened three new stores, which are expected to yield strong returns based on historical performance. This brings the total to ten new stores opened on a year-to-date. Moreover, its remodeled stores are proving helpful in attracting traffic and sales. The company remodeled eleven locations during the quarter with plans to complete a total of 44 by the end of fiscal 2024.
However, despite these positive developments total revenue decreased by 3% year-over-year, totaling $453 million. Comparable store sales also fell by 7.7% during this period. Management attributed the decline to adverse weather and ongoing remodels disrupting operations. The company aims to open four more stores (three Dave & Buster’s and one Main Event) by the end of this fiscal year, with an international franchise store planned in Bengaluru, India.
Patient Capital Management stated the following regarding Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) in its Q3 2024 investor letter:
“We started a position in Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) during the quarter, a leading dining and entertainment venue in the United States. Founded in 1982 in Dallas, Texas the company has expended to over 200 venues in North America across two brands (Dave & Busters, and Main Event). The company is in the middle of a multi-year transformation focused on reinvigorating growth through store remodels, store expansions, and technology upgrades while improving the margin profile of the business through cost optimizations and synergies. All the hard work has not shown up in the numbers yet as the macro environment continues to weigh on consumer expenditures. As the company continues to deliver against their plan, we believe the effort will lead to a drastically improved business model as consumer spending returns. In the meantime, the company continues to return cash to shareholders buying back 19% of shares since 2023.”
While we acknowledge the potential of Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLAY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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