Lions Gate Entertainment Corp. LGF, producer and distributor of motion pictures for theatrical and straight-to-video release, has teamed up with comic book publisher Double Take (2T) for the big screen version of graphic novel Z-Men.
We note that Double Take is a subsidiary of top video game developer and publisher Take-Two Interactive Software, Inc. TTWO. Launched quite recently, Z -Men is based on the classic horror movie Night of the Living Dead. Lionsgate appears positive about the film adaptation of Z-Men and feels that it would intrigue both moviegoers and comic book fans.
Lionsgate has been trying to diversify its product portfolio and hence, pursuing different agreements. Last week, the company entered into an agreement with China’s leading online video platform iQIYI to stream its own and third-party feature films. Under the deal, Lionsgate will not only provide video on demand (SVOD) but also provide transactional video on demand (TVOD) to iQIYI.
The company has made some positive moves recently, which includes expanding its Television segment and online presence. Although the company’s performance in the last quarter was disappointing, Lionsgate’s effort to diversify its business is a good sign for investors.
Earlier, the company had extended its domestic distribution deal with Miramax and entered into an agreement with Millennium Films and Hong Kong-based mobile game developer and publisher Fifth Journey to launch The Expendables themed mobile game. Lionsgate also collaborated with Tribeca Enterprises to introduce a subscription video on demand service to cater to the fast growing online viewership. Moreover, the company entered the game arena by making a major investment in Telltale Games, one of the leading game developers and publishers.
We are encouraged by Lionsgate’s diversification strategy and expect these deals to drive the company’s top line in the long term
Zacks Rank
Lionsgate currently carries a Zacks Rank #1 (Strong Buy). A couple of other favorably placed stocks in the same industry include Twenty-First Century Fox, Inc. FOX and News Corporation NWSA. While Twenty-First Century Fox carries a Zacks Rank #1, News Corp. holds a Zacks Rank #2 (Buy).
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