Lions Gate Entertainment Corp. has a massive hit on its hands with "The Hunger Games: Catching Fire,” which took in an estimated $161 million over the weekend in the U.S. and Canada -- the biggest November opening of all time.
But Wall Street hasn't been kind to the company's stock on Monday.
Shares of Santa Monica-based Lions Gate, which trades on the New York Stock Exchange, were down as much as 11% on Monday, hitting a low of $30 at one point.
Ascendiant Capital analyst Marla Backer said she wasn't surprised the stock was taking a hit.
"But I'm a little surprised by how steep the drop is," said Backer, who rates Lions Gate a "buy."
Backer said that stock's fall might be attributed to the film missing some analysts' box-office expectations. Though the picture was a massive hit, and the second-biggest opening of the year behind the blockbuster "Iron Man 3," some analysts had hoped the movie would take in as much as $175 million domestically.
"There were estimates that were just really, really high -- and probably very unrealistically high," she said. "And I think today people are looking at the number and ... saying, 'Why didn’t this movie open to $180 million, like so and so said?' I think it is an overreaction."
Backer also said that the stock could be down because shareholders who bought on anticipation of the Jennifer Lawrence-starring sci-fi action film's strong performance are now selling in the aftermath of the film's success.
"We are seeing a little bit of buy on anticipation, sell on the news," she said.
Research notes put out by several analysts on Monday morning put a positive spin on the performance of the film, which earned a coveted "A" rating from CinemaScore. Analysts noted that the film received strong reviews, and suggested that positive word of mouth would help "Catching Fire" have staying power.
Backer said that the demographic makeup of the film's audience -- 50% of moviegoers were over the age of 25 -- suggests "it will have more playability than some of these blockbusters that open to huge numbers," because it could tap a wider adult audience than some expected.
"You can get a huge opening week and then the multiple trails off," she said. "We will see how 'The Hunger Games' plays out."
The movie also had a strong showing overseas, taking in $147 million. "Catching Fire" is now showing in 63 markets outside of the U.S. and Canada. It will be released in more than 30 additional territories in the coming weeks, opening in the key markets of France and Italy next weekend, and in Japan in late December.
The first "Hunger Games" picture opened to $153 million last year; it went on to gross $691 million worldwide. Lions Gate will release two more "Hunger Games" films in November 2014 and November 2015.
Shares of Lions Gate are down about 18% over the last month. On Nov. 8, Lions Gate reported a profit of $505,000 for the fiscal quarter that ended Sept. 30 -- a large decline from the same quarter a year earlier, when the studio made $75.5 million.
Revenue was $498.7 million, off 29% from $707 million for the same quarter a year ago, when Lions Gate was aided by the home entertainment release of the first "Hunger Games" film.
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