For 18 months now, six quarters in a row, movie maker Lions Gate (NYSE:LGF) has never failed to ... fail. By which I mean it's consistently fallen short of Wall Street expectations for its GAAP profit. So will Friday's Q4 2008 earnings report be just another a sequel, or a blockbuster opening to a new era of beating expectations?

What analysts say:

  • Buy, sell, or waffle? Fifteen analysts review Lions Gate, giving the stock 11 buy ratings, three holds, and a sell.
  • Revenue. On average, they're looking for quarterly sales to rise 24% to $410.9 million ...
  • Earnings. ... while profits are predicted to nearly double to $0.37 per share.

What management says:
After making its most recent deposit in the SEC litterbox, Lions Gate leapt into action last quarter, trying to allay investor concerns over its serial underperformance. And I must say, there's nothing so soothing as the sound of a great cat purring sweet nothings in our ear. Lions Gate promised to report $400 million in revenue for Q4, and to end the year with at least $110 million in free cash flow.

What management does:
It was a big promise -- but in all honesty, Lions Gate probably needed to make a big promise in order to offset the negative impression given by what it's actually produced in recent years:





























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
No two ways about it, these GAAP numbers look ugly. But as I argued back in February, Lions Gate's promise -- if fulfilled -- would make the stock an attractive buy. It would value the stock at something like 10 times this year's free cash flow, with earnings expected to grow at 21% or more per year going forward. Relative to the valuations on offer at peer moviemakers like Marvel (NYSE:MVL) and DreamWorks Animation SKG (NYSE:DWA) -- both of which have already earned the thumbs-up from Motley Fool Stock Advisor, I might add -- that looks good to me.

What's more, say all you want about the lumpy earnings of the movie biz, but Lions Gate has generated free cash flow in the neighborhood of $100 million per year for three years running now. The company has a strong stable of partners; it produces content for for Disney's (NYSE:DIS) ABC and CBS' (NYSE:CBS) Showtime, and most recently, it inked a deal with Mexico's Grupo Televisa SA (NYSE:TV).

Put it all together, and in my opinion, Lions Gate is one of the smartest operators in the media space. I expect it to outperform, and I've rated it accordingly on Motley Fool CAPS. Unless Lions Gate coughs up a hairball on Friday, I will seriously consider putting real money behind the opinion.