IMAX Corp (IMAX) is expecting to open over 40 new theaters this year and earnings are at record levels.
Company Description
IMAX Corp is an entertainment technology company specializing in movie theaters that go above and beyond your typical experience. IMAX screen have state of the art sound and image quality giving an “immersive” experience.
Revenues Double
On Apr 29 IMAX reported a 120% spike in revenue for the first quarter, to a company record of $73 million. The company also set a record high for earnings, pulling in 40 cents per share. I may be the only guy left who hasn’t seen Avatar yet, which the company credited for a significant contribution to the quarterly results.
The EPS number was 7 cents ahead of the Zacks Consensus Estimate and up drastically from a loss one year ago. This was the fourth surprise in the past 5 quarters for IMAX.
Expanding Network
IMAX inked 41 contracts in the first quarter, a vast improvement over the 3 deals in the same quarter one year ago. The company is now expecting to install up to 45 new theaters, up from its previous forecast’s high end of 40.
Rising Estimates
After the financial results hit the wire analysts quickly upped their projections for IMAX. The full-year 2010 Zacks Consensus estimate rose 34 cents to 94 cents.
Next year’s estimates are averaging $1.02, up 28 cents in the last 3 months. The growth is exponential given IMAX made 10 cents a share in 2009.
The forward P/E is about 18 times, which is not too bad, but won’t be luring in value investors. However, when you factor in the growth rate you get a PEG of 0.8, which means that growth is coming at a discount.
The Chart
Good charts are hard to find in the midst of the month-long sell off that we are going through. However, if you can stomach the risk, good stocks are trading at a discount, like IMAX.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service Zacks Investment Research
