IMAX's Remarkable Recovery - 3Q Box Office Earnings Highlight Strong Growth

Benchmark analyst Mike Hickey maintained Imax Corp IMAX with a Buy and raised the price target from $23 to $24.

IMAX's global box office (GBO) for 3Q significantly exceeded Hickey's estimate, generating $347 million, compared to his projected $237 million. 

The GBO achieved a remarkable 141% of its pre-pandemic performance for the same quarter, underlining the impressive ongoing recovery of IMAX. Hickey anticipates that China could present further recovery potential in 2024. 

Meanwhile, Domestic and International markets will likely match or exceed their pre-pandemic box office benchmarks, IMAX's most robust 3Q performance ever, and ranks as their second-best quarterly result. The transaction between IMAX China and IMAX would be a significant growth catalyst but faces potential hurdles, as Letko, a substantial shareholder, opposes it, making its approval uncertain. 

Hickey now sees revenues of $94.6 million, which surpasses the consensus estimate of $91.4 million. 

In addition, his adjusted EBITDA projection got a boost to $30.4 million, compared to the consensus forecast of $28.3 million, bringing his adjusted EBITDA margin to 32.2%, exceeding the consensus margin of 30.9%. 

IMAX's global box office earnings reached $347.1 million. The domestic tally hit $130.8 million, reflecting an 88% jump from the previous year. Greater China's revenue touched $93.5 million, showcasing an astounding 140% year-over-year growth. On the other hand, the Rest of the World accounted for $122.7 million, marking a 79% year-over-year rise. 

Cumulatively, this points to a significant uptick in IMAX's overall performance, with a commendable 96% year-over-year increase in the global box office. 

Hickey projects Q3 revenue of $94.58 million vs. consensus of $91.40 million.

Price Action: IMAX shares traded lower by 2.14% at $19.40 on the last check Monday.