Investors are used to seeing IMAX (NASDAQ:IMAX) head south lately. The shares imploded last month after the company announced that it was under investigation for revenue-recognition practices and that its buyout process had hit a snag with a dearth of acceptable offers. Over the past six weeks, IMAX shares have gone from peaking at $11 to crashing down below $5.

This time, however, IMAX is heading south in the geographical sense. The company behind the gargantuan film screens announced a deal to build an IMAX theater at a new shopping mall in Sao Paulo, Brazil. It should open next year.

The company struck its first Brazilian deal last year. If all of the outstanding licensing deals are executed, IMAX will be servicing 29 screens in South America alone come 2008. Just before the recent debacle, IMAX had also signed a Ukrainian deal, so the company's global reach certainly continues to expand despite its troubles. In fact, IMAX now has 274 screens spread across 38 countries.

The Brazil deal is encouraging at a time when IMAX can use a little loving. Even if confidence in the company's executives was shot after the recent news came out, the big-screen model still had a chance to prove itself. So far, it has. The company is also coming off a strong second quarter in which profits from continuing operations quadrupled to $0.08 per share as the top line soared 34% higher to hit $41.4 million.

However, analysts expect the good times to hit a pocket of resistance. They have been writing down the company's prospects since sniffing around last month's warhead. Analysts who once expected the company to earn $0.42 a share this year and $0.62 a share come 2007 are now holding out for just $0.23 a share and $0.25 a share, respectively.

An unattractive balance sheet that sports slightly negative book value isn't helping, either, as the company's leverage becomes a disadvantage. IMAX is now hoping that one of its original suitors -- perhaps Sony (NYSE:SNE) or a private-equity firm -- comes through with a buyout offer. Exhibitors still seem to be enamored with the audience-attracting product; it's the investing community that isn't sold on giving IMAX another chance.

That's a pity, because IMAX has a lot to offer for the tired multiplex industry. The company has bucked the trend of sluggish box-office sales by producing healthy film-revenue growth over the past few years.

Now if only the company could learn to say "I'm sorry" in Portuguese, we'd be all set.

IMAX was recommended last summer to Motley Fool Rule Breakers newsletter subscribers. You can read the original recommendation and have access to all of the newsletter service's growth stock picks with a free trial subscription.

Longtime Fool contributor Rick Munarriz loves to spot great things early. That's why he's been with The Motley Fool since 1995. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.