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.
You're not done, True Believer! This is just one pulse-pounding part of a fantastically Foolish four-part Duel! Don't miss Titanic Tim Beyers' bearish beginning, Dazzlin' W.D. Crotty's bullish riposte, and Tim's rebuttal. When you're done, you're still not done. You can vote and let us know who you think won this Duel.
More from The Motley Fool
Don't Laugh, but After Horrible Holiday, Sears Says Profitability Is Still on the Table for 2018
The retailer has few options open to it to get into the black.
4 Things That Can Get Your Resume Thrown Away
Getting hired is a competition. Don't get disqualified before the game really begins.
3 Growth Stocks That Could Put Netflix's Returns to Shame
Looking for the next Netflix? We've identified a video game publisher, a chip company, and an internet-based bank as potentially explosive growth vehicles.