Imax Corporation Stock Upgraded (IMAX)

NEW YORK ( TheStreet) -- Imax Corporation (NYSE: IMAX) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • IMAX's revenue growth has slightly outpaced the industry average of 13.4%. Since the same quarter one year prior, revenues rose by 22.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • IMAX's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for IMAX CORP is rather high; currently it is at 60.80%. It has increased significantly from the same period last year. Along with this, the net profit margin of 15.80% is above that of the industry average.
  • Net operating cash flow has significantly increased by 1177.34% to $9.42 million when compared to the same quarter last year. In addition, IMAX CORP has also vastly surpassed the industry average cash flow growth rate of 16.16%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 507.1% when compared to the same quarter one year prior, rising from $1.83 million to $11.08 million.

IMAX Corporation, together with its subsidiaries, operates as an entertainment technology company specializing in motion picture technologies and presentations worldwide. The company has a P/E ratio of 54.2, below the average media industry P/E ratio of 81.3 and above the S&P 500 P/E ratio of 17.7. Imax has a market cap of $1.5 billion and is part of the services sector and media industry. Shares are up 21.8% year to date as of the close of trading on Tuesday.

You can view the full Imax Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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