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Marcus Corp. (MCS)
:MCS
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Marcus
(NYSE:MCS)
62Neutral
Positive Factors
Film Slate
The 2Q slate is exceptionally strong with A Minecraft Movie, with upcoming titles including Sinners, Thunderbolts, Mission Impossible, How to Train Your Dragon, and F1.
Financial Performance
The stock is trading at a forward 5.5x EV to AEBITDA, nearly half its normal multiple, is driving cash flow, pays a dividend, has a share repurchase plan, a notable catalyst in the upcoming film slate, and a proven defensive profile in economic downturns.
Theater Amenities
The company's theatres have a robust suite of amenities that have proven popular with consumers.
Negative Factors
Film Costs
Elevated film costs and labor drag are expected to pressure concession margin as staffing expenses were misaligned with actual delivered attendance.
Theatrical Segment Challenges
Marcus's theatrical segment likely faced a tough 1Q, with flat to down admissions and pressured margins driven by elevated film rental costs from holiday holdovers and labor inefficiencies tied to the surprise collapse of Snow White.
Marcus (MCS) vs. S&P 500 (SPY)
Market Cap
$525.72M
Dividend Yield1.65%
Average Volume (3M)172.06K
Price to Earnings (P/E)―
Beta (1Y)0.47
Revenue Growth0.82%
EPS Growth-152.64%
CountryUS
Employees2,907
SectorCommunication Services
Sector Strength81
IndustryEntertainment
Share Statistics
EPS (TTM)-0.25
Shares Outstanding24,711,330
10 Day Avg. Volume143,873
30 Day Avg. Volume172,065
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.90
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.49
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.67Price Target Upside51.36% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Marcus Business Overview & Revenue Model
Company DescriptionThe Marcus Corporation, together with its subsidiaries, owns and operates movie theatres, and hotels and resorts in the United States. It operates in two segments, Theatres, and Hotels and Resorts. The Theatres segment operates multiscreen motion picture theatres, as well as Funset Boulevard, a family entertainment center. The Hotels and Resorts segment owns and operates full-service hotels and resorts, as well as manages full-service hotels, resorts, and other properties. The company also provides hospitality management services, including check-in, housekeeping, and maintenance for a vacation ownership development. As of December 30, 2021, it owned or operated 1,064 screens at 85 movie theatre locations in 17 states under the Marcus Theatres, Movie Tavern by Marcus, and BistroPlex brands; and operated 8 wholly-owned or majority-owned hotels and resorts, as well as managed 11 hotels, resorts, and other properties for third parties. The company was founded in 1935 and is headquartered in Milwaukee, Wisconsin.
How the Company Makes MoneyMarcus makes money primarily through interest income from its lending products, such as personal loans and savings accounts. The company charges interest on the loans it provides to customers, which constitutes a significant portion of its revenue. Additionally, Marcus earns money through the management of investment accounts and the fees associated with these services. The platform also benefits from partnerships with other financial technology companies, enhancing its product offerings and expanding its customer base. The combination of interest income, service fees, and strategic partnerships forms the core of Marcus's revenue model.
Marcus Financial Statement Overview
Summary
Marcus demonstrates strong revenue recovery post-2020, with a TTM revenue of $735.56 million. However, profitability is an issue with a negative net profit margin of -1.06%. The balance sheet is stable, but significant debt remains a risk. Cash flow is under pressure due to high capital expenditures, despite robust operating cash flow.Income Statement
Marcus has shown a steady recovery in revenue from a low point in 2020, achieving a TTM revenue of $735.56 million, up from $237.69 million in 2020. The gross profit margin for TTM is approximately 57.28%, which is strong. However, the net profit margin for the TTM is negative at -1.06%, indicating issues in achieving profitability. The EBIT and EBITDA margins are 2.26% and 9.96% respectively, showing improvement but still indicating operational challenges.75
Positive
Balance Sheet
The balance sheet shows a favorable equity ratio of 100% due to total liabilities being equal to stockholders' equity, indicating no leverage pressure. The debt-to-equity ratio has decreased over the years, but the current total debt remains significant at $398.85 million. The return on equity is not calculable for TTM due to negative net income, indicating profitability issues despite solid asset management.70
Positive
Cash Flow
Operating cash flow remains robust at $103.94 million, but free cash flow has declined to $24.73 million in the TTM, showing stress from increased capital expenditures. The operating cash flow to net income ratio is positive, indicating good cash generation from operations. However, the free cash flow to net income ratio is strained due to negative net income.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 735.56M | 729.58M | 677.39M | 458.24M | 237.69M | Gross Profit |
| 669.17M | 323.96M | 257.39M | 183.74M | 51.14M | EBIT |
| 16.17M | 33.93M | 8.31M | -38.29M | -153.75M | EBITDA |
| 68.72M | 101.67M | 74.53M | 31.84M | -104.47M | Net Income Common Stockholders |
| -7.79M | 14.79M | -9.10M | -43.29M | -124.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 40.84M | 60.95M | 21.70M | 17.66M | 6.75M | Total Assets |
| 1.04B | 1.07B | 1.06B | 1.19B | 1.25B | Total Debt |
| 249.84M | 379.06M | 407.77M | 515.10M | 563.47M | Net Debt |
| 209.00M | 323.47M | 386.07M | 497.44M | 556.72M | Total Liabilities |
| 579.66M | 593.93M | 607.68M | 734.75M | 755.46M | Stockholders Equity |
| 464.87M | 471.17M | 456.92M | 453.61M | 498.72M |
| Cash Flow | Free Cash Flow | |||
| 24.73M | 63.85M | 56.37M | 29.17M | -89.92M | Operating Cash Flow |
| 103.94M | 102.63M | 93.21M | 46.25M | -68.55M | Investing Cash Flow |
| -81.90M | -36.75M | -346.00K | 10.88M | -12.07M | Financing Cash Flow |
| -37.30M | -30.55M | -92.41M | -47.17M | 69.10M |
Marcus Technical Analysis
Positive
16.96
Price Trends
16.93
Positive
18.97
Negative
17.54
Negative
Market Momentum
-0.09
Negative
55.63
Neutral
69.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCS, the sentiment is Positive. The current price of 16.96 is above the 20-day moving average (MA) of 16.17, above the 50-day MA of 16.93, and below the 200-day MA of 17.54, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 55.63 is Neutral, neither overbought nor oversold. The STOCH value of 69.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCS.
Marcus Risk Analysis
Marcus disclosed 29 risk factors in its most recent earnings report. Marcus reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Marcus Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.57B | 14.72 | 67.31% | 0.26% | -0.56% | 63.92% | |
62 Neutral | $525.72M | ― | -1.66% | 1.65% | 0.82% | -152.64% | |
59 Neutral | $13.76B | 7.65 | -2.18% | 3.85% | 2.32% | -36.56% | |
52 Neutral | $1.01B | ― | -14.99% | ― | 22.32% | -184.25% | |
45 Neutral | $265.25M | 13.94 | -23.80% | ― | -10.71% | -202.93% | |
45 Neutral | $1.16B | ― | 20.03% | ― | -3.64% | 48.94% | |
39 Underperform | $37.96M | ― | -245.80% | ― | -5.48% | -14.32% |
* Communication Services Sector Average
Performance Comparison
MCS
Marcus
16.96
5.89
53.21%
AMCX
AMC Networks
6.25
-6.27
-50.08%
CNK
Cinemark Holdings
30.30
13.35
78.76%
AMC
AMC Entertainment
2.68
-0.61
-18.54%
RDI
Reading International
1.29
-0.36
-21.82%
SPHR
Sphere Entertainment
28.06
-12.68
-31.12%
Marcus Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q3-2024)
| % Change Since: -18.74%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in the third quarter with record-breaking results across both divisions. Theatres and Hotels & Resorts both outperformed expectations, with significant revenue and profitability growth. Challenges such as the impact of convertible debt repurchase and underperformance against competitors in the hotel segment were noted, but they were outweighed by overall strong performance and positive future outlook.Q3-2024 Updates
Positive Updates
Record-Breaking Third Quarter Results
The Marcus Corporation reported a record third quarter with consolidated revenues of $233 million, an increase of over 11%. Both the Theatre and Hotels & Resorts divisions outperformed, contributing to record revenue, operating income, and adjusted EBITDA.
Theatres Division Outperformance
Theatres reported third quarter total revenue of $143.8 million, a 13.6% increase from the previous year. The division outperformed the industry by approximately 5.7 percentage points with a 24.3% increase in adjusted EBITDA.
Hotels & Resorts Division Success
The Hotels & Resorts division achieved revenues of $88.7 million, an 8.1% increase. RevPAR for comparable owned hotels grew 9.8%, aided by the Republican National Convention, and adjusted EBITDA increased by 18.7%.
Debt Retirement and Share Repurchases
The company completed the retirement of convertible debt and repurchased approximately 693,000 shares of common stock, reflecting strong balance sheet management and confidence in future performance.
Positive Future Outlook
The company is optimistic about the upcoming film slate for 2025, which is expected to boost theatre attendance with major titles including Superman: Legacy and Avatar 3.
Negative Updates
Impact of Convertible Debt Repurchase
The repurchase of convertible debt resulted in a negative impact to net earnings of $1.5 million or $0.05 per share for the third quarter.
Hotels Underperformance in Competitive Set
Despite overall success, Marcus Hotels underperformed their competitive set by 2.6 percentage points, primarily due to a higher mix of contractual airline crew business at lower rates.
Slower Start in October for Theatres
October began slower than expected, highlighting that not every big-budget movie performs well, suggesting potential volatility in theatre performance.
Company Guidance
During the third-quarter earnings call for The Marcus Corporation, the executives reported notable financial metrics, highlighting a record performance with consolidated revenues reaching $233 million, an increase of over 11% from the previous year, and adjusted EBITDA totaling $52.3 million. The theatre division showed significant growth, with total revenue rising 13.6% to $143.8 million, outperforming the industry by approximately 5.7 percentage points. This success was driven by an increase in comparable theatre admission revenue by 9.5% and attendance by 7.1%. The average admission price also rose by 2.6%, contributing to a 7.9% increase in per capita concession, food, and beverage revenues. Additionally, the Hotels & Resorts division reported revenues of $88.7 million, up 8.1%, with RevPAR for comparable owned hotels growing by 9.8%. The company's strategic decisions, such as the retirement of $13.5 million in convertible debt and share repurchases totaling $9.7 million, further strengthened their financial position, with a net leverage of 1.7x net debt to adjusted EBITDA.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.