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Imax Corp IMAX

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Imax Revenue Remains Constrained by Limited Film Releases; Local Films Continue to Pay Off in China

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Imax posted a better-than-expected second quarter as both revenue and adjusted EBITDA beat FactSet consensus expectations. While Imax’s quarterly box office rebounded strongly, it still only came in at one third of the grosses for the second quarter of 2019. The slow box office recovery was expected, but the ongoing spread of the Delta variant and the possible return of lockdowns could kill off the recovery before it speeds up. Imax remains largely dependent on the timing of the release slate from the major studios, local capacity constraints, and the willingness of consumers to return to theaters as they reopen. We are maintaining our narrow moat and $22 fair value estimate.

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Company Profile

Business Description

Imax is now primarily a technology hardware and brand-licensing company that does not operate the vast majority of Imax theaters. Instead, the firm generates revenue via selling and leasing the required proprietary equipment and via fees for digitally remastering standard films into the proprietary Imax format. The firm has expanded from 210 commercial theaters in 2008 to over 1,650 today and increased the annual number of Imax releases from 13 in 2007 to 60 in 2019.

Contact
2525 Speakman Drive
Mississauga, ON, L5K 1B1, Canada
T +1 905 403-6500
Sector Communication Services
Industry Entertainment
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 622

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