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Marcus Corp. (MCS)
NYSE:MCS
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Marcus
(NYSE:MCS)
Rating:66Neutral
Price Target:
$18.50
▲( 8.44% Upside)
Positive Factors
Earnings
The second quarter box office has gotten off to an exceptional start with April box office more than doubling YOY and in line with the average for April box office from 2015-2019.
Financial Performance
A strong balance sheet with low debt remains a valuable attribute for the company.
Investment Strategy
The company is balancing capital returns with asset value creation and remains well-positioned as a recovery and defensively oriented play.
Negative Factors
Costs and Expenses
Elevated film costs and labor drag are expected to pressure concession margin as staffing expenses were misaligned with actual delivered attendance.
Gross Margin Pressure
Much of the performance was driven by holdover titles from the 2024 holiday season, which carry elevated film rental terms and are expected to meaningfully pressure film gross margin.
Market 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. SPDR S&P 500 ETF (SPY)
Market Cap
$522.02M
Dividend Yield1.64%
Average Volume (3M)162.84K
Price to Earnings (P/E)―
Beta (1Y)0.43
Revenue Growth4.18%
EPS Growth-207.46%
CountryUS
Employees2,907
SectorCommunication Services
Sector Strength89
IndustryEntertainment
Share Statistics
EPS (TTM)-0.54
Shares Outstanding24,312,990
10 Day Avg. Volume164,889
30 Day Avg. Volume162,841
Financial Highlights & Ratios
PEG Ratio-2.76
Price to Book (P/B)1.16
Price to Sales (P/S)0.00
P/FCF Ratio21.23
Enterprise Value/Market Cap1.60
Enterprise Value/Revenue0.29
Enterprise Value/Gross Profit1.99
Enterprise Value/Ebitda2.61
Forecast
1Y Price Target
$25.25Price Target Upside48.01% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Marcus Business Overview & Revenue Model
Company DescriptionMarcus (MCS) is a financial services platform operating under Goldman Sachs, offering a range of consumer financial products including savings accounts, personal loans, and investment services. The company aims to simplify personal finance management by providing accessible and user-friendly digital tools that cater to the needs of individual consumers.
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 shows strong revenue recovery post-2020 with a solid gross profit margin. However, profitability is a concern with a negative net profit margin, and cash flow is under pressure due to high capital expenditures. The balance sheet is stable with reduced leverage but significant debt remains a risk.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 |
| 327.84M | 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 |
| 352.63M | 379.06M | 407.77M | 515.10M | 563.47M | Net Debt |
| 311.79M | 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
17.06
Price Trends
16.61
Positive
18.26
Negative
17.90
Negative
Market Momentum
0.10
Negative
53.90
Neutral
26.48
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 17.06 is above the 20-day moving average (MA) of 16.82, above the 50-day MA of 16.61, and below the 200-day MA of 17.90, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 53.90 is Neutral, neither overbought nor oversold. The STOCH value of 26.48 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.73B | 21.43 | 71.46% | 0.25% | -0.80% | 13.07% | |
66 Neutral | $522.02M | ― | -2.83% | 1.64% | 4.18% | -207.46% | |
61 Neutral | $14.08B | 5.95 | -4.18% | 3.68% | 2.79% | -36.29% | |
58 Neutral | $1.35B | ― | -14.67% | ― | 29.49% | -184.23% | |
55 Neutral | $1.40B | ― | 20.03% | ― | -5.43% | 26.07% | |
55 Neutral | $278.55M | 13.94 | -25.83% | ― | -8.14% | -258.98% | |
49 Neutral | $48.06M | ― | -540.12% | ― | -7.36% | 18.52% |
* Communication Services Sector Average
Performance Comparison
MCS
Marcus
17.06
6.24
57.67%
AMCX
AMC Networks
6.20
-10.86
-63.66%
CNK
Cinemark Holdings
32.45
15.42
90.55%
AMC
AMC Entertainment
3.24
-1.64
-33.61%
RDI
Reading International
1.43
-0.17
-10.63%
SPHR
Sphere Entertainment
37.38
2.10
5.95%
Marcus Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 4.09%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Marcus Corporation. While there were positive aspects such as revenue growth in both divisions, a strong April for theaters, and a robust balance sheet, challenges included an operating loss in the theater division, occupancy impacts from hotel renovations, and increased costs affecting profitability. The positive outlook for the summer movie season and strategic capital returns to shareholders provide some optimism.Q1-2025 Updates
Positive Updates
Revenue Growth in Both Divisions
Consolidated revenues increased by $10.2 million or 7.4% compared to the prior year, reaching $148.8 million. This growth was observed in both the theaters and hotels divisions.
Positive April and Summer Outlook for Theaters
April saw a turnaround with several films exceeding expectations, contributing to a strong start for the summer movie season. The industry is up nearly 16% year-to-date through April, with upcoming major releases contributing to a positive outlook.
Hotel Division RevPAR and Revenue Growth
Hotels and resorts revenues increased by 7.2% to $61.3 million. RevPAR for comparable owned hotels grew by 1.1%, with an 8% increase in the average daily rate.
Strong Balance Sheet and Liquidity
The company ended the quarter with $12 million in cash and over $192 million in total liquidity, maintaining a debt-to-capitalization ratio of 31% and net leverage of 2x.
Successful Capital Return to Shareholders
The company repurchased approximately 424,000 shares for $7.1 million, and over the last four quarters, returned over $25 million to shareholders through dividends and share repurchases.
Negative Updates
Theater Division Operating Loss and Attendance Decrease
Operating loss for the quarter was $20.4 million, negatively impacted by increased costs. Theater attendance decreased by 8% on a straight calendar quarter basis, trailing the industry by 1.8 percentage points.
Renovation Impact on Hotel Occupancy
The Hilton Milwaukee renovation led to a 3.4 percentage point decrease in overall occupancy rate and negatively impacted RevPAR growth by nearly 4 percentage points.
Increased Costs and Decreased Adjusted EBITDA
Consolidated adjusted EBITDA was a loss of $300,000, a decrease of $2.6 million. Increased depreciation, stock-based compensation, and labor costs contributed to this decline.
Company Guidance
In the call, Marcus Corporation provided guidance for the first quarter of fiscal 2025, highlighting several key metrics. The company reported consolidated revenues of $148.8 million, an increase of $10.2 million or 7.4% from the previous year, with the theater division contributing $87.4 million, up 7.5%, and the hotels and resorts division contributing $61.3 million, up 7.2%. The favorable impact of a fiscal calendar change accounted for $9.2 million in revenue growth. However, the company faced an operating loss of $20.4 million, an improvement of $3.7 million from the prior year, partly due to increased depreciation expenses and non-cash stock-based compensation. Despite challenges, including higher film and labor costs, the theater division's adjusted EBITDA was $3.7 million, while the hotels segment achieved $1 million in adjusted EBITDA. Marcus Corporation ended the quarter with $12 million in cash and $192 million in total liquidity, maintaining a debt-to-capitalization ratio of 31% and net leverage of 2x. The company also repurchased 424,000 shares for $7.1 million, reflecting confidence in its business and commitment to returning capital to shareholders.Marcus Corporate Events
Shareholder MeetingsBusiness Operations and Strategy
Marcus Approves 2025 Omnibus Incentive Plan
Positive
May 12, 2025
On May 7, 2025, The Marcus Corporation’s 2025 Omnibus Incentive Plan became effective following shareholder approval at the annual meeting. This plan allows for equity and cash incentive awards, including the issuance of up to 2,000,000 shares of common stock. The plan’s approval impacts the company’s operations by enabling it to offer substantial incentives to employees, potentially enhancing employee retention and aligning their interests with those of shareholders.
The most recent analyst rating on (MCS) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Marcus stock, see the MCS Stock Forecast page.
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.