Madison Square Garden Down 17% YTD: Should You Hold or Fold the Stock?

Madison Square Garden Sports Corp. MSGS shares have plunged 16.7% so far this year compared with the industry and the S&P 500’s decline of 15.5% and 7.6%, respectively. The recent decline can be primarily attributed to market volatility and a challenging environment in regional sports networks.On Thursday, the stock closed at $187.96, 21% below its 52-week high but 8.5% above its 52-week low. Year to date, other industry players like Cinemark Holdings, Inc. CNK and Manchester United plc MANU shares have lost 12.3% and 22.3%, respectively. Shares of Life Time Group Holdings, Inc. LTH have rallied 106.4% in the same time frame.MSG Sports faces a challenging environment in regional sports networks. Furthermore, Altice USA dropped MSG Networks from its optimum service, exacerbating the situation.On the other hand, the company’s revenues in second-quarter fiscal 2025 benefited from more games compared to the prior year, the third and fourth quarters will have three fewer regular season home games, potentially tempering future top-line growth. Image Source: Zacks Investment ResearchDespite the recent aforementioned concerns and current market volatility, the company’s stock in the past month has lost only 0.3% compared with the industry and the S&P 500’s decline of 5% and 2.6%, respectively.  Let’s delve deeper and find out the factors that can drive the company’s performance.Factors Likely to Aid MSGSThe company continues to benefit from enthusiastic fan support for both the Knicks and Rangers. Season ticket renewal rates reached approximately 97% in second-quarter fiscal 2025, and flexible ticket plans saw growing demand. This, along with higher average ticket yield and paid attendance per game, fueled a strong rise in ticketing revenues.Robust consumer spending within the arena continues to aid the company. The company noted higher per capita spending on food, beverages, and merchandise. Unique collaborations, such as branded collections with KISS and New York or Nowhere, boosted merchandise sales to near-record levels for single-game events.The company secured high-profile marketing partnerships, including a jersey patch deal with Abu Dhabi’s Department of Culture and Tourism and multiyear agreements with Lenovo/Motorola, Verizon, and Benjamin Moore, boosting global visibility and sponsorship income.The Knicks have continued to strengthen their brand through unique collaborations with partners like KISS and New York or Nowhere — efforts that have proven successful enough to expand to the Rangers this season. These partnerships are clearly striking a chord with fans, as evidenced by record-setting single-game merchandise sales when the Knicks debuted a new kids’ collection and the Rangers launched their collaboration with New York or Nowhere. Additionally, the organization is boosting fan engagement with special events, such as the inaugural Knicks Homecoming weekend, which celebrated the franchise’s storied past and former players.MSGS Trades at a PremiumMSGS is trading at a premium on a forward 12-month price-to-sales (P/E) ratio basis. MSGS’ forward 12-month P/S ratio stands at 4.52X, higher than the industry. MSGS is also trading at a premium compared to other industry players like Cinemark Holdings, Manchester United and Life Time Group Holdings.MSGS P/S Ratio (Forward 12 Months)End NoteMadison Square Garden faces short-term challenges, including market volatility and headwinds in regional sports networks, yet it continues to demonstrate strong fundamentals that support a hold strategy for investors. The company benefits from unwavering fan loyalty, evident in near-full season ticket renewals and increased demand for flexible ticket plans. Elevated in-arena spending and successful brand collaborations with names like KISS and New York or Nowhere have driven merchandise sales to impressive levels, while high-profile sponsorships are enhancing global visibility and revenue diversification. While near-term challenges remain, MSG Sports is capitalizing on its premium brand positioning and fan engagement initiatives, suggesting that long-term fundamentals remain intact, making the stock worth holding through current market volatility. MSGS currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Manchester United Ltd. (MANU): Free Stock Analysis Report Cinemark Holdings Inc (CNK): Free Stock Analysis Report The Madison Square Garden Company (MSGS): Free Stock Analysis Report Life Time Group Holdings, Inc. (LTH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks