Top Movie Theater Stocks for Q4 2022

CNK, AMC, and IMAX are top for value, growth, and performance, respectively.

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.

Domestic theaters suffered from drastic declines in revenue during the peak of the pandemic in 2021, and they are still struggling to recover. Ticket sales jumped sharply percent in June 2022 from June 2021, but were still down from June 2019, before the pandemic. The impact of the pandemic continued during the crucial summer season. The domestic box office saw $3.3 billion in ticket sales, but still down about 20% from 2019 levels.

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 -17.0% over the past year. This market performance figure and all statistics in the tables below are as of Sept. 29, 2022.

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

Best Value Movie Theater Stocks

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.

Best Value Movie Theater Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/S Ratio
Cinemark Holdings Inc. (CNK) 12.55 1.5 0.6
AMC Entertainment Holdings Inc. (AMC) 7.10 3.7 0.9
Imax Corp. (IMAX) 14.36 0.8 2.8

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. Cinemark reported Q2 2022 earnings figures on Aug. 5. Revenue more than doubled year-over-year (YOY) on narrowing net losses. Revenue growth was driven by strong performance across all of the company's business lines.
  • 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" initially was a positive driver of the company's shares. But the shares have plunged faster than the broader market in 2022. On Aug. 4, AMC announced a special dividend of one AMC Preferred Equity unit for each share of AMC Class A common stock. The special dividend was paid Aug. 19 and the preferred Equity units began trading on the NYSE on Aug. 22 under the ticker APE. Each unit holds the same voting rights as equivalent shares of common stock.
  • 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. IMAX reported on Sept. 22 that it had acquired Canada-based artificial intelligence-based streaming technology company SSIMWAVE. IMAX acquired the company for $18.5 million in cash and $2.5 million in stock, with an additional payment of up to $4 million depending on the achievement of certain performance and financial objectives. SSIMWAVE is expected to bolster IMAX's image enhancement capabilities.

Fastest Growing Movie Theater Stocks

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.

Fastest Growing Movie Theater Stocks
  Price ($) Market Cap ($B) Revenue Growth (%)
AMC Entertainment Holdings Inc. (AMC) 7.10 3.7 162.3
Cinemark Holdings Inc. (CNK) 12.55 1.5 152.6
IMAX Corp. (IMAX) 14.36 0.8 45.2

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.

Movie Theater Stocks With the Best Performance

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.

Movie Theater Stocks With the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
IMAX Corp. (IMAX) 14.36 0.8 -23.5
Cinemark Holdings Inc. (CNK) 12.55 1.5 -34.4
AMC Entertainment Holdings Inc. (AMC) 7.10 3.7 -80.0
Russell 1000 Index N/A N/A -17.0

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.

Advantages of Movie Theater Stocks

Meme Potential: Movie theater stocks have the potential to become part of a meme stock frenzy where retail traders use social media apps to coordinate organized buying in stocks that are heavily shorted by institutional investors. Indeed, in early 2021, movie theater chain AMC's share price gained over 3,700% over a six-month period as meme-driven buyers piled into the stock. As of September 2022, AMC, Cinemark, and Imax have 17%, 23.6%, and 10% of their respective floats held short, making them all possible targets for meme traders looking for their next short squeeze play.

Crypto-Friendly: Leading movie theater companies have started accepting cryptocurrencies, helping them engage with one of their key target markets. According to Global Cinema Advertising Association SAWA, the key 14 to 34 demographic accounts for half the visits to theaters. This cohort roughly aligns with those who trade crypto, which may encourage more cinema visits, especially during bull markets. In September 2021, AMC started accepting Bitcoin, Bitcoin Cash, Ether, and Litecoin for ticket purchases. More recently, the move theater chain added meme cryptocurrencies Dogecoin and Shiba Inu as payment options via its mobile app.

Risks of Movie Theater Stocks

Steaming Services Growth: Movie theater stocks face increasing competition from the growth of streaming services. Cashed-up tech titans like Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN), along with entertainment giant The Walt Disney Company (DIS), offer on-demand streaming options. Consumers can purchase unlimited streaming content for $10 to $15 per month, making these services much cheaper than taking a family to the big screen. As steaming services continue to grow in popularity, there's a risk that film producers could bypass movie theaters in favor of the steaming model if it brings in the same amount of money.

Future Pandemics: Although most sectors faced significant challenges during the COVID-19 pandemic, movie theater stocks bore the brunt of voluntary shutdowns. Furthermore, customers stayed away for months after cinemas reopened over concerns about contracting the virus. During 2020, AMC, Cinemark, and Imax suffered declines in revenue of 77.29%, 79%, and 65%, respectively. Therefore, future pandemics pose a potential threat to cinema operators.

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Article Sources
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