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Holiday Guide to the Entertainment Industry: IMAX Tear Down

Vishesh Kumar

With its unique in-theater experience, IMAX is poised to be a big beneficiary of a strong holiday box office.
 
As movie-goers flock to theaters in near-record numbers this year, it’s clear that consumers still crave top cinematic experiences. Few companies deliver on that promise like IMAX.

IMAX-overview

Above: AlphaSense Sentiment Analysis scores IMAX at a 64, up 2 points after a favorable Q3 earnings call.

AlphaSense analysis reveals that the company’s quality and innovation have struck a chord with customers. Analysts at Morningstar note that IMAX has leveraged its projection systems to capture 50% market share in the premium large-form cinema marketplace.

Over the past decade, the IMAX experience has grown from 210 theaters in 2008 to over 1,500 theaters across 18 countries in 2019. IMAX releases have multiplied from 13 in 2007 to 70 in 2018.

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Above: Document trends for “Holidays” are up 385% over the last 90 days - especially analyst report publications - as interest grows in how IMAX might perform ahead of the closely-watched holiday season.

Innovation also extends to the company’s business model: the company is now driven by technology hardware and brand-licensing, and does not operate the vast majority of its theaters, Morningstar notes.

That approach has delivered success with consumers and the bottom line, analysts at Wedbush note. The firm says that the IMAX box office has been stellar and projects the success into 2020. The third quarter global box office on IMAX screens ended up 19% year-over-year, and the fourth quarter global box office is trending up 43%.

China, meanwhile, is the key growth driver for the company, Morningstar analysts note. Already the company’s largest market with 631 screens, the country has another 276 in backlog. That compares to 400 active and under 50 in backlog for the US.

As the holiday season gets into full swing, investors will be watching closely to see that the IMAX promise of an immersive experience continues to be as compelling as expected, both in the US and abroad.

Below we use AlphaSense Sentiment Analysis to identify key developments and outlook for the company:

IMAX-transcript (4)

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