IMAX’s Valuation Is in Fantasy Land

Ockham Research submits: Imax Corp. (IMAX), which operates giant screened movie theatres as well as licenses the technologies to third parties, reported an outstanding fiscal fourth quarter 2009 on Thursday morning. The company benefited from the blockbuster success of Avatar, which is arguably one of the most visually appealing movies ever made. The high screen quality as well as the ability to show 3D films was a key reason for Imax’s surging revenue in the quarter. To date, Avatar on its own has been responsible for $218 million in box office revenue at IMAX theatres. In the recent quarter, sales rose 98% to $54.2 million and easily topped analysts’ estimates of $45.3 million. Earnings came in at $.20 per share easily topping the analysts’ view of 6 cents due to the greatly increased traffic due to feature films like Avatar. In addition to Avatar, IMAX appears to have another huge blockbuster on its hands as just last week Alice in Wonderland shattered previous IMAX opening weekend sales totals. Globally, IMAX sold $15.2 mln in tickets with nearly 80% of that from US theatre locations. The success of the movie’s opening weekend sent IMAX shares more than 18% higher in three trading...

Source: Media Sector and Stocks Analysis from Seeking Alpha