IMAX Corporation (IMAX): A Bull Case Theory

We came across a bullish thesis on IMAX Corporation on Raging Bull Investments’s Substack. In this article, we will summarize the bulls’ thesis on IMAX. IMAX Corporation’s share was trading at $27.96  as of June 30th. IMAX’s trailing and forward P/E were 60.78 and 26.88 respectively according to Yahoo Finance.

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An audience of moviegoers inside a theatre, savoring the latest cinematic experience.

IMAX Corp. stands out as the premier player in the ongoing “premiumization” trend reshaping the cinema industry, driven by audience demand for elevated theatrical experiences and higher per-patron spend. The company’s core strength lies in its dual business model: remastering films into the proprietary IMAX format, and providing or leasing enhanced theatre systems globally. In exchange for converting films into IMAX format, the company earns ~11% of box office revenues from studios.

On the systems side, IMAX monetizes its offerings via sale, lease, or increasingly popular revenue-sharing models, in which it provides the system and installation at its own cost and earns ~7% of box office revenue from exhibitors. With just under 1% of global screens, IMAX commands 3.5% of the global box office—a market share that has grown over 40% since 2018. This reflects both strong demand and the format’s success in drawing premium-paying audiences.

IMAX has grown its global system base from 863 in 2012 to 1,738 today across 89 countries, with over 350 systems in the backlog and significant runway remaining. Studios are increasingly releasing tentpole films in IMAX, and directors are now shooting directly with IMAX cameras to leverage its superior quality and revenue potential—leading to higher take rates for IMAX.

With a robust moat built on proprietary technology, brand strength, and high switching costs for exhibitors, IMAX is uniquely positioned in the PLF market. Its royalty-like business model, operating leverage, and alignment with studios and exhibitors make it a compelling investment opportunity.

Previously we covered a bullish thesis on The Marcus Corporation by Waterboy Investing in October 2024, which highlighted the company’s strong cinema and hotel segments, along with valuable real estate holdings. The company’s stock price has appreciated by approximately 9% since our coverage. This is because the hotel segment grew steadily. Raging Bull Investments shares a similar view but emphasizes IMAX’s premium format leadership.

IMAX isn’t on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of IMAX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IMAX and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.