It's no secret that the movie theater industry was hit hard by the COVID-19 pandemic. However, box office sales have seen a solid rebound now that economies around the world have reopened, production schedules have returned to normal, and audiences have warmed back up to the theater-going experience.
If you're wondering which companies are best positioned to benefit from performance for theatrical films and cinemas, then keep reading.
Best movie theater stocks
Best movie theater stocks
Here are some interesting movie theater stocks for investors to consider:
1. IMAX
1. IMAX
IMAX (IMAX 6.66%) is known for its proprietary screen technology, which it licenses to exhibitors, including AMC. The company has an asset-light business model, and it doesn't have to build or maintain theaters. IMAX licenses include the intellectual property and tech that allow massive screens to show films.
Another competitive advantage is that the company's premium screens allow exhibitors to charge higher ticket prices to the many moviegoers willing to pay more for immersive experiences. This characteristic could become increasingly valuable as movie theater chains contend with and adapt to competition from streaming services. Inside Out 2's generation of roughly $1.7 billion in ticket sales and Deadpool & Wolverine's gross of roughly $1.3 billion indicates people are still hungry for theatrical experiences. 2025 releases, including Avatar: Fire and Ash and Zootopia 2, could once again highlight the value of IMAX's technologies and services.
With the theater business increasingly revolving around big-budget, special-effects-heavy films that benefit from IMAX's premium viewing format, the company is on track to play a big role in shaping the future of the industry. IMAX is also financially strong -- taking into consideration the effects of the pandemic -- and has more cash than debt on its balance sheet.
2. Disney
2. The Walt Disney Company
The Walt Disney Company (DIS 0.99%) is not a pure-play movie theater stock, but few companies are better positioned to benefit if the theater industry experiences a strong recovery. Before the pandemic, Disney was dominating the box office, and the House of Mouse will undoubtedly continue to shape the future of cinema.
The company released the only three films in 2024 to gross at least $1 billion at the global box office. Disney stands a good chance of winning the box office again thanks to big sequels in series, including Avatar, Zootopia, and the Marvel Cinematic Universe (MCU).
With its wealth of popular characters and mega-franchises, including the MCU and Star Wars, the company's stable of content is unmatched. Of the top 10 highest-grossing films at the global box office, eight were directly produced or coproduced by Disney.
The diversified nature of Disney's businesses also makes the company a less risky investment than pure-play movie theater stocks. If the theatrical segment falters, the company's popular Disney+ streaming service should still enable it to benefit from ongoing growth in demand for streaming media. Disney's parks and resorts and media networks also typically perform well, in part because the media empire has numerous lucrative channels for monetizing its characters and content.
One stock to avoid
One stock to avoid: AMC Entertainment
AMC Entertainment (AMC 1.16%) is the world's largest movie theater chain. In a surprising turn of events, the stock has also posted impressive returns over the past few years despite a challenging industry backdrop and weak business performance.
AMC's share price skyrocketed in early 2021, thanks to a short squeeze and the stock's becoming a favorite among retail investors on Reddit and other social media hubs. Shares have come down substantially from the high amid the meme-stock fervor, but business challenges and valuation concerns remain.
With more than $4 billion in long-term debt, repaying that and a sizable interest expense will be a challenge even if the movie theater chain sells more stock. The business posted big losses during the pandemic, but it was also unprofitable in 2019, too. The business posted big losses in 2023 and 2024 and needs to demonstrate it has a pathway back to reliable profits.
AMC no longer trades at elevated meme-stock levels, but the company's poor business fundamentals suggest that shares could continue to struggle. The movie theater industry should have some strong bright spots this year, but AMC's debt and ongoing losses could make it hard for the stock to rally.
Related investing topics
Trends
Trends in the movie theater industry
The COVID-19 pandemic caused major theater chains to close for months and operate at limited capacity for even longer. The pandemic also affected production and release schedules for movies. These pressures have now mostly lifted, but the movie theater industry faces significant long-term challenges.
The growth of streaming services is reducing the value proposition offered by cinemas. Some large film production companies, including Disney, have opted to release major films via direct-to-consumer streaming channels instead of using traditional movie theaters. Other competing entertainment options include video games and social media.
Meanwhile, theater chains are offering new experiences, including higher-quality seating and dining experiences. Although they can differentiate the movie theater experience from at-home viewing, they are not likely to replace demand for streaming distribution services.
Ticket sales for movie theaters will likely rise, thanks to a slate of upcoming 2025 films that look commercially stronger than 2024's. Some movie theater stocks may perform well in 2025 despite longer-term challenges for the broader industry. Still, investors should approach the theater industry with caution.
