Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, jumbo-movie-screen specialist IMAX (NASDAQ:IMAX) has received a distressing two-star ranking.

With that in mind, let's take a closer look at IMAX's business and see what CAPS investors are saying about the stock right now.

IMAX facts

Headquarters (Founded)

Mississauga, Canada (1967)

Market Cap

$600 million


Movies and entertainment

Trailing-12-Month Revenue

$134.8 million


CEO Richard Gelfond (since April 2009)

CFO Joseph Sparacio (since August 2007)

Return on Capital (Average, Past 3 Years)


Cash / Debt

$49 million / $135.7 million

6-Month Return


Highly Rated Entertainment Stocks

Disney (NYSE:DIS)

DreamWorks Animation (NASDAQ:DWA)

CAPS Members Bearish on IMAX Also Bearish on



CAPS Members Bullish on IMAX Also Bullish on

General Electric (NYSE:GE)

Johnson & Johnson (NYSE:JNJ)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 8.9% of the 1,020 members who have rated IMAX believe the stock will underperform the S&P 500 going forward. These bears include All-Star mdemag, who is ranked in the top 10% of our community, and minnjim1.

Earlier this month, mdemag chucked a few tomatoes at IMAX's financials:

It's a great product; but horrible margins, fluctuating earnings based on the whim of kid's interests, and negative book value. Too many things have to change to justify over $9/share (sustained revenue growth, order of magnitude increase in margins, extra cash). IMAX has a lot of potential, but it's too dangerous right now.

In an earlier pitch, minnjim1 also tapped IMAX as a must-miss stock:

Irrational exuberance has sent the price of IMAX stock up way too high for its fundamentals. Negative profit margin, operating margin, return on assets, net income, even EBITDA and book value are negative. These are not signs of a healthy business.

As for the new theaters and movie deals, the fact is that there are very few IMAX theaters. The new theaters that everyone is gushing about are not really IMAX theaters, they are existing standard-size movie theaters with their screens enlarged slightly, because you can't fit a real IMAX screen into a standard movie theater.

What do you think about IMAX, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. IMAX is a Motley Fool Rule Breakers recommendation. Disney, DreamWorks, and Netflix are Stock Advisor selections. Disney is also a choice of Inside Value. Johnson & Johnson is an Income Investor pick. The Fool's disclosure policy always gets a perfect score.