IMAX Corporation (USA) (NYSE:IMAX) has been churning out impressive growth rates over the past 10-years. It has managed to grow its cash flow by over 23%, annually, over the past 10-years. It’s book value has grown by a remarkable 45.3% annually over this time as well. Its EPS growth has not been as robust as the growth in cash flow and book value, however, it has still grown by over 13% annually for a decade which is the fourth highest in the sub-industry.
In an absolute sense, IMAX’s valuation multiples seem very high. It is currently trading at 16.8x cash flow, 5.8x sales, and 2.8x book value. However, current levels are well below that average multiples IMAX has traded at over the past 10-years. IMAX is trading at a 70% discount to its average P/B multiple and a 30% discount to its average P/CF multiple.
From a technical perspective, the downtrend that IMAX Corporation (USA) (NYSE:IMAX) has been in since 2015 seems to have moderated. Previous levels of resistance that existed from 2012-2014 now look like it will provide support for IMAX. We would expect to see IMAX challenge resistance levels around line B in the chart below. If resistance gives way, IMAX could be set for a multi-year relative performance uptrend that could make current valuation multiples look cheap.