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Top Movie Theater Stocks for Q4 2022

Movie theater companies own and operate cinemas and concession stands in both local and national chain models. As a component of the consumer discretionary sector, movie theaters tend to perform well when customers have disposable income and poorly when the economy is struggling or during times of market turbulence. The COVID-19 pandemic devastated movie theaters as a group due to plummeting attendance, a consequence of the economic recession and because millions of consumers chose to shelter at home. The industry is slowly recovering. The biggest names in the movie theater industry include AMC Entertainment Holdings Inc. and IMAX Corp.

The domestic theater market is forecast to post box office receipts of $6.8 billion this year, up sharply from $4.6 billion in 2021 but far short of the roughly $10 billion in annual receipts in the years before the pandemic, according to industry publication The Numbers. With the crucial summer season fast approaching, theater owners expect strong ticket sales following soaring ticket sales from early-2022 movies like “The Batman” and “Spider-Man: No Way Home.” These and other blockbusters have helped to drive a sharp increase in sales growth thus far in 2022 compared to the same period a year earlier.

Though there is no benchmark for publicly traded movie theater companies, a helpful benchmark is the Russell 1000 Index, which has provided a total return of -13.2% over the past year. This market performance figure and all statistics in the tables below are as of June 14, 2022.

Here are the top three movie theater stocks with the best value, fastest growth, and best performance.

These are the movie theater stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.

Source: YCharts

  • Cinemark Holdings Inc.: Cinemark is a holding company that, through its subsidiaries, owns and operates movie theaters. The company has operations throughout the U.S. and Latin America. On May 6 the company reported earnings results for Q1 2022. Net losses narrowed significantly year-over-year (YOY) as total revenues quadrupled. Cinemark saw strong growth in admissions, concession, and other revenues.
  • AMC Entertainment Holdings Inc.: AMC Entertainment is a holding company that, through its subsidiaries, provides movie theater services including movie screenings, food, online ticket booking, and other similar services. The company operates theaters worldwide. AMC became a subject of interest on the popular trader subreddit forum WallStreetBets last year. This popularity and the development of AMC as a “meme stock” was a key driver of the company’s share price. AMC reported Q1 2022 results on May 9. Net losses narrowed sharply YOY as total revenues rose more than fivefold. Strong sales growth of tickets, food, beverages, and other items drove AMC’s results.
  • IMAX Corp.: IMAX is a Canada-based entertainment technology company. It specializes in developing motion-picture technologies and offering large-format motion-picture presentations. The company does not generally own theaters, but sells or leases its IMAX Theater System to theater operators. In late April, IMAX reported a significant expansion to its network of theaters in Asia. The company is partnering with Major Cineplex to provide three new IMAX with Laser systems in Thailand, as well as two theaters in Japan in partnership with AEON Entertainment.

These are the movie theater stocks with the highest YOY sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new ways, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.

Source: YCharts

  • AMC Entertainment Holdings Inc.: See above for company description.
  • Cinemark Holdings, Inc.: See above for company description.
  • IMAX Corp.: See above for company description.

These are the movie theater stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.

Source: YCharts

  • IMAX Corp.: See above for company description.
  • Cinemark Holdings Inc.: See above for company description.
  • AMC Entertainment Holdings, Inc.: See above for company description.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.