IMAX Corporation is strategically positioned to capture significant market share gains in 2025, as cinema enthusiasts increasingly show a preference for the company's exceptional screen technology. As the theatre industry undergoes transformation, IMAX is not only expanding its global presence but also ramping up its partnerships to create more content specifically filmed for its advanced projection systems.
This insight comes from Wedbush Securities, which shared its analysis in a note to clients this Tuesday. The innovative company, renowned for designing and manufacturing cutting-edge IMAX cameras and projection systems, is witnessing growth driven primarily by consumer demand for its unparalleled viewing experiences.
According to Wedbush, IMAX's strategy to expand its filmed-for-IMAX collaborations is expected to propel incremental growth moving forward. IMAX is actively diversifying its portfolio by embracing alternative content to enhance revenue streams. The company is extending its footprint worldwide, striving to exceed its peak earnings before interest, taxes, depreciation, and amortization (EBITDA) margins within the next three years, as articulated by Wedbush's analysts. "The key narrative here is the anticipated surge in the number of titles filmed for IMAX in 2025, which will significantly outpace past years," stated Alicia Reese and her team at Wedbush.
They noted that this growth is likely to lead to substantial market share gains, especially as IMAX integrates its branding into the marketing campaigns for these films—a tactic that has historically shown to boost box office performance. Looking ahead, Wedbush projects IMAX's revenue for the fourth quarter to reach $121.9 million, exceeding their prior estimate of $119.9 million.
This upward revision stems from heightened expectations regarding the movie content releasing within the upcoming three-month timeframe. The projection highlights the increasing box office success on IMAX screens, with an expected almost 80% annual increase due to last year’s lower movie output, adversely affected by Hollywood's writers' and actors' strikes. In examining the third quarter, Wedbush has expressed optimism regarding the box office potential for IMAX stemming from Walt Disney's eagerly awaited release of Marvel's "Deadpool & Wolverine." However, there are concerns about potential revenue declines due to underperforming titles like Lionsgate Films' "Borderlands." The pivotal moment now hinges on whether any of the films set for release in September can exceed expectations, as IMAX is poised for improved revenue outcomes in the current quarter.
Nevertheless, the firm anticipates a year-over-year box office decline of approximately 10% on IMAX screens for the quarter. Reiterating its favorable outlook, Wedbush has maintained its outperform rating on IMAX's stock while also increasing its 12-month price target from $24 to an optimistic $26. Over the recently concluded Labor Day weekend, the domestic box office grossed an impressive $102.6 million, according to data from BoxOfficeMojo, a subsidiary of Amazon's IMDb.
Notably, "Deadpool & Wolverine" emerged as the top performer, amassing $19.4 million domestically within the Friday to Monday window across 3,630 theaters, closely followed by Disney's "Alien: Romulus," which garnered $11.2 million..