NEW YORK (TheStreet) -- Shares of Regal Entertainment Group (RGC - Get Report) are down by -1.32% to $20.93 on Monday as some movie theater stocks are declining following a weak Fourth of July box office weekend.
The holiday weekend brought in approximately $130 million, a 43.4% decrease from last year's $230 million, Variety reports.
New releases could not keep up with last year's successful July fourth $143 million launch of "Despicable Me 2."
Other stocks falling as a result include Cinemark Holdings Inc. (CNK - Get Report), down -2.66% to $34.74, Carmike Cinemas Inc. (CKEC - Get Report), down -1.00% to $34.68, and AMC Entertainment Holdings Inc. (AMC - Get Report), lower by -0.24% to $24.57.
Separately, TheStreet Ratings team rates REGAL ENTERTAINMENT GROUP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:"We rate REGAL ENTERTAINMENT GROUP (RGC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $128.00 million or 15.41% when compared to the same quarter last year. In addition, REGAL ENTERTAINMENT GROUP has also modestly surpassed the industry average cash flow growth rate of 5.61%.
- REGAL ENTERTAINMENT GROUP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REGAL ENTERTAINMENT GROUP increased its bottom line by earning $1.00 versus $0.93 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus $1.00).
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The gross profit margin for REGAL ENTERTAINMENT GROUP is rather low; currently it is at 19.25%. Regardless of RGC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, RGC's net profit margin of -0.16% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: RGC Ratings Report
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