IMAX Gaining On All Grounds - Analyst Highlights StreamSmart Technology And Global Expansion as Catalysts

Wedbush analyst Alicia Reese reiterated an Outperform rating on the shares of IMAX Corp IMAX with a price target of $22.

The company is slated to report its first-quarter FY24 earnings on April 25, Thursday.

The analyst expects first-quarter revenue of $82 million vs. the prior estimate of $76 million and consensus of $77 million, with EPS of $0.15 vs. the previous estimate of $0.09 and consensus of $0.08.

IMAX reported a total global first-quarter box office on IMAX screens of $260 million, ahead of the $216 million estimate, thereby raising the analyst’s first-quarter revenue estimate by $9 million in revenue from studios and theater partners.

The analyst estimates a 58.3% gross margin (up 72 basis points Y/Y) driven by the outperformance of Dune 2 and sees IMAX to maintain its guidance for adjusted EBITDA margin in the high-30% range in 2024 and 40% in 2025.

IMAX remains on Wedbush’s Best Ideas List, given the analyst’s view that IMAX is the best way to play any upside to 2024 estimates as consumers’ ongoing shift toward premium screens is driving significant market share gains.

IMAX is less impacted by reduced release slate volume in 2024 and thus, should see less volatility, added the analyst.

The brand is expanding its relevance globally by leaning into local-language content and there is an opportunity with IMAX’s StreamSmart technology, which could drive estimates higher down the road, said the analyst.

The analyst thinks IMAX can roughly double its screen base, and should be able to accelerate its annual screen growth as its theater partners return to profitability and have more disposable cash to upgrade theaters.

Price Action: IMAX shares are trading higher by 0.94% at $17.24 on the last check Thursday.

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