What happened
Shares of cinema company Imax (IMAX 1.69%) rose 20.8% in September according to data provided by S&P Global Market Intelligence. The stock opened at $15.79 on Sept. 1 and closed at $18.98 on Sept. 30, the final day in the month that markets were open. It rose as high as $19.15 on Sept. 30 and is up more than 13% for the year.
Image source: Getty Images.
So what
Investors are starting to see the giant projector light at the end of the pandemic tunnel for Imax. The company began the month with its biggest September weekend in global box office receipts, thanks to the release of Disney/Marvel's Shang-Chi and the Legend of the Ten Rings. Over the four-day Labor Day weekend, the company said it earned $13.6 million from the film and had total revenue of $16.8 million, its best weekend since the pandemic began.
The news came on top of the company's second-quarter report in late July that showed Imax was seeing more-promising numbers, with revenue of $51 million, up 475% year over year, and adjusted EBTIDA of $8.7 million, up 147.3% over the same period last year.
Now what
Imax appears to be ready for the great reopening, whenever that is. Its October numbers are already looking good, though they had no impact on September's stock price. The company said Sony/Marvel's Venom: Let There Be Carnage earned $9.6 million in its opening weekend Imax debut in October, good for 9.5% of the film's overall revenue. The film's $8.6 million gross in North America was reported as Imax's best opening weekend since the pandemic began.
One advantage that Imax has over competitor and meme stock AMC Entertainment Holdings is the continued emphasis on action blockbusters such as Black Widow and No Time to Die, which need to take advantage of theatrical releases. Those are the types of films that Imax specializes in (movies designed for loyal theatergoers), and that insulates the company to some degree from the price pressures of streaming and video-on-demand releases. It also has an advantage in global reach, which gives it more diversity as its 1,654 theaters are spread across 85 countries, compared to 950 theaters in 15 countries for AMC. If you're looking to invest in a theater stock, Imax's price-to-sales ratio is 6.649, nearly half that of AMC's 11.97.
Imax also said in a second-quarter report that it is seeing pent-up demand for watching films in theaters, and that demand is already playing out in Asia and emerging markets.
