Back to top
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Alphabet Inc. (GOOG) - $25 value - yours FREE >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alphabet Inc. (GOOG) - $25 value - yours FREE >>
Image: Bigstock
IMAX Downgraded to Sell: Is it Time to Offload the Stock?
On Jun 21, 2016, Zacks Investment Research downgraded IMAX Corporation (IMAX - Free Report) to a Zacks Rank #4 (Sell).
Dismal box-office performance of movies like Alice Through The Looking Glass and Teenage Mutant Ninja Turtles: Out of The Shadows will hurt IMAX’s top line in the second quarter of 2016. Also, the company has low expectations from the upcoming release, Independence Day: Resurgence. In contrast, hit releases like Furious 7, Avengers 2 and Jurassic World last year had boosted IMAX’s revenues significantly.
Note that IMAX’s business model has been gradually shifting from equipment to box-office releases. As a result, the company is becoming increasingly dependent on the success of Hollywood films. Thus, its future performance now depends on the company’s selection of movies as well as the performance on its theaters.
Also, the company lacks diversification. An expanding international presence outside the U.S. exposes IMAX to foreign currency exchange rate risks as well. The company may also face competition from Dolby cinemas, which is offering enhanced sound and picture quality. Moreover, recent survey data showed that in 2015, movie attendance in theatres reached its lowest in the past 20 years. This trend indicates growing demand for online streaming services like Netflix Inc. (NFLX - Free Report) and Hulu.com.
However, we are impressed by IMAX’s focus on the Chinese market which offers tremendous commercial potential. Also, its recent agreement to develop Virtual Reality (VR) cameras with Alphabet Inc. (GOOG - Free Report) to create a unique 3D VR experience in theatres may give it a competitive edge over its peers. However, consumer-oriented VR headsets like Oculus Rift, manufactured by Facebook Inc’s Oculus VR could prove to be a challenge, going ahead.
IMAX CORP Price
IMAX CORP Price | IMAX CORP Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>