My opponent says, "Just bear in mind that the new films have to use characters we haven't yet seen on the big screen."
Except for sequels, how many times have you walked into a Pixar
Pixar, after just six feature films, has $901 million in cash, no debt, and another movie nearing completion. It trades for a premium multiple of 31.5 trailing earnings because analysts expect the company to grow earnings by 21% a year for the next five years (vs. 10.7% for the S&P 500).
I've already explained why I think 2006 estimated earnings are understated. The same is true for 2007, when Spider-Man 3 arrives from Sony
Marvel has other revenue streams to tap, including TV. A Fantastic Four animated TV show is in production for late 2006, and cable's SpikeTV is working on a Blade series.
Based solely on expected annual growth, the valuation is low. Add in breakout earnings potential, and the stock starts to look really exciting.
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