IMAX’s (NYSE: IMAX) latest earnings report and shareholder love is larger than life. While the company’s Q2 2024 showed year-over-year declines in revenue and profitability, IMAX still beat analyst expectations. Revenue reached $88.96 million, surpassing projections of $76.01 million. IMAX has also treated its shareholders well. It invested $175 million in share repurchases since 2020, buying back 19% of outstanding shares. The company maintains a strong liquidity position with $392 million available.
How Does IMAX Work?
IMAX, a niche market player in the movie industry, is an attractive investment alternative to roller coaster meme stocks like AMC. IMAX is a smaller company than AMC Entertainment, and it doesn’t get the same buzz, but it’s a safer bet. Despite recent challenges in the theater business, such as the pandemic, IMAX has shown resilience and growth potential.
The company offers unique technologies for visually enhanced films, catering to both theatrical and home entertainment markets. IMAX has increased its global presence, with 1,780 systems operating in 89 countries as of June 2024. New system signings rose by 89% in Q2, and installations increased by 20%.
IMAX has raised its full-year 2024 installation guidance to 130-150 systems, up from 128 in 2023. Additionally, the company is seeing record demand from filmmakers and studios for 2025 releases.
What Investors Need To Know
The reaction to IMAX’s earnings beat was fairly muted, but its stock rose from a close of $17.83 to a high of $20.09 following the report. At midday on Tuesday, it was trading around $20.525.
YTD, IMAX shares have delivered a 33.75% return. They trade at a slight discount compared to the industry average, with a P/S ratio of 3.05x versus 3.43x. Analysts rate the stock a Strong Buy, with an average price target of $25.33, suggesting a potential upside of just under 24%.
While IMAX faces challenges, such as the theater industry downturn, its strategic positioning, technological advantages, and growth prospects make it a strong investment option. It’s especially recommended for those seeking alternatives to volatile meme stocks in the entertainment sector.
Neither Julie Stoller nor Stocks.News has positions in this company.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...