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Cineplex (TSE:CGX)
TSX:CGX

Cineplex (CGX) AI Stock Analysis

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Cineplex

(TSX:CGX)

Rating:60Neutral
Price Target:
C$11.00
▼(-6.46%Downside)
Cineplex's overall stock score reflects a complex mix of financial challenges and technical strengths. The most significant factors are financial performance risks from high leverage and negative profitability. However, positive technical momentum and optimistic future guidance provide a counterbalance, highlighting potential growth opportunities.
Positive Factors
Market Position
Cineplex is the dominant motion picture exhibitor in Canada with over three-quarters of the box office share.
Revenue Growth
Q1 revenues were 1% ahead of expectations.
Upcoming Movie Slate
The second quarter movie slate carries names such as Thunderbolts, Mission: Impossible – The Final Reckoning, Lilo & Stitch, Karate Kid: Legends, Ballerina, How to Train Your Dragon, Elio, and F1, which are expected to boost performance.
Negative Factors
Box Office Performance
The box office results for Q1/25 came in notably lower than expected totalling $101.9M, compared to the original projection of $130.1M, ~65% of pre-pandemic levels.
Economic Conditions
Economic slowdown is expected to reduce F25 same-store LBE revenues by ~3-5%.
Profitability Challenges
Rec Room same store revenue fell 8.1% due to a number of factors while profitability in the segment was negative.

Cineplex (CGX) vs. iShares MSCI Canada ETF (EWC)

Cineplex Business Overview & Revenue Model

Company DescriptionCineplex Inc. (CGX) is a leading entertainment and media company in Canada, primarily known for its chain of movie theatres. It operates in several sectors, including film exhibition, media, amusement, and leisure, offering a diverse array of entertainment options. Cineplex's core services include movie screenings, live events, and gaming, while also providing food and beverage services at its locations. The company is headquartered in Toronto and is a major player in the Canadian entertainment industry.
How the Company Makes MoneyCineplex makes money through multiple revenue streams, with the primary source being box office sales from movie screenings. Additional significant revenue comes from concessions, where the company sells food and beverages to moviegoers. Cineplex also generates income from its media division by selling advertising space in its theatres and on its digital platforms. The amusement and leisure segment, which includes gaming and entertainment venues like The Rec Room and Playdium, contributes to the company's earnings. Lastly, Cineplex benefits from strategic partnerships and distribution agreements, enhancing its content offerings and driving additional revenue.

Cineplex Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q1-2025)
|
% Change Since: 16.09%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong growth in the media business and international content strategy, but challenges in box office performance and theater attendance. While there are promising signs of recovery in the second quarter, the first quarter was marked by some financial setbacks.
Q1-2025 Updates
Positive Updates
Media Business Growth
Total media revenues increased by 32.9% to $29.7 million, with cinema media revenue growing 38% to $17.1 million. This growth was driven by strong demand in categories like pharmaceuticals and financial services.
International Content Strategy Success
International content contributed 14.7% of the first quarter box office, surpassing the North American box office at 5.9%.
Location-Based Entertainment Expansion
Revenue from location-based entertainment increased by 10.5% to $38.1 million due to three new locations opening.
Encouraging Box Office Recovery
April box office delivered 176% of the prior year's results, driven by the success of the Minecraft Movie.
Negative Updates
Softer Box Office Performance
First quarter box office revenue decreased to $100.9 million, reflecting an 18.5% decline due to lower attendance and a decrease in box office per patron.
Decrease in Theater Attendance
Theater attendance was down 14.5% compared to the prior year, attributed to a lack of compelling content.
Negative Adjusted EBITDA
Adjusted EBITDA was negative $10.8 million, compared to positive $4.6 million in the prior year.
Same-Store Sales Decline in LBE
Same-store revenue declined 8.1% due to economic conditions, leap year comparison, and adverse weather impacts.
Company Guidance
During the Cineplex Q1 2025 earnings call, guidance highlighted several key metrics and optimistic projections. Despite a softer box office performance in the first quarter, with revenue at $100.9 million and a 14.5% decline in attendance, the company saw robust growth in its Media business, which increased by 32.9% to $29.7 million. This was driven by a 38% rise in cinema media revenue and a 26.5% increase in digital place-based media. The company also reported success in its location-based entertainment segment, which grew revenue by 10.5% to $38.1 million. Looking ahead, Cineplex is optimistic about the upcoming film slate, expecting strong box office comparatives, as April alone delivered 176% of the prior year's box office. With strategic studio partnerships and new releases, the company anticipates sustained growth across all business segments, reinforced by its diverse offerings and market positioning.

Cineplex Financial Statement Overview

Summary
Cineplex is facing financial challenges characterized by revenue volatility, negative profit margins, and high leverage. While operational efficiency is evident from EBITDA margins and positive cash flow from operations, the heavy reliance on debt and negative equity position pose significant risks. Future performance will depend on stabilizing revenue and improving profitability to ease financial leverage.
Income Statement
61
Positive
Cineplex's income statement shows mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is healthy at 61.21%, but the net profit margin is negative at -6.11% due to a net loss. Revenue growth has been volatile, with a decline in recent periods, indicating challenges in maintaining sales momentum. EBITDA margin is relatively strong at 16.48%, suggesting operational efficiency despite bottom-line losses.
Balance Sheet
45
Neutral
The balance sheet indicates financial stress. The negative equity of $74.14 million reflects a highly leveraged position, with a debt-to-equity ratio being undefined due to negative equity. Return on Equity (ROE) is also not calculable for the same reason. The equity ratio is negative, highlighting significant dependence on debt financing, which poses a risk in periods of financial instability.
Cash Flow
55
Neutral
Cash flow analysis shows some positive signs with a positive free cash flow and an operating cash flow to net income ratio of -1.26, indicating operational cash generation despite net losses. However, free cash flow growth has been inconsistent, and financing cash flow is negative, suggesting repayment of debt or reduction in financing activities.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.30B1.33B1.39B1.27B656.67M418.26M
Gross Profit
795.79M891.71M926.91M848.04M439.81M280.42M
EBIT
35.68M87.93M149.19M50.94M-154.88M-314.75M
EBITDA
214.27M189.94M320.15M319.35M107.12M-350.57M
Net Income Common Stockholders
-79.46M-37.68M167.16M113.00K-248.72M-624.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
17.95M83.87M36.67M34.67M26.94M16.25M
Total Assets
2.14B2.29B2.27B2.15B2.11B2.33B
Total Debt
1.82B1.84B1.90B1.93B1.84B1.90B
Net Debt
1.80B1.75B1.86B1.89B1.82B1.88B
Total Liabilities
2.22B2.33B2.31B2.36B2.33B2.31B
Stockholders Equity
-74.14M-39.70M-39.44M-211.81M-219.72M24.23M
Cash FlowFree Cash Flow
16.32M79.66M145.68M32.93M28.18M-188.73M
Operating Cash Flow
100.46M162.01M209.13M107.15M61.00M-106.31M
Investing Cash Flow
-70.09M69.94M-72.94M-55.75M40.45M26.71M
Financing Cash Flow
-104.89M-185.10M-134.34M-43.35M-91.13M71.62M

Cineplex Technical Analysis

Technical Analysis Sentiment
Positive
Last Price11.76
Price Trends
50DMA
10.01
Positive
100DMA
10.34
Positive
200DMA
10.67
Positive
Market Momentum
MACD
0.52
Negative
RSI
67.46
Neutral
STOCH
85.52
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CGX, the sentiment is Positive. The current price of 11.76 is above the 20-day moving average (MA) of 10.84, above the 50-day MA of 10.01, and above the 200-day MA of 10.67, indicating a bullish trend. The MACD of 0.52 indicates Negative momentum. The RSI at 67.46 is Neutral, neither overbought nor oversold. The STOCH value of 85.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CGX.

Cineplex Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSCGO
74
Outperform
C$630.35M7.2210.38%5.49%0.06%115.11%
64
Neutral
C$578.17M-6.14%3.52%9.94%-147.16%
61
Neutral
$14.20B5.93-4.31%3.70%2.75%-35.73%
TSCGX
60
Neutral
$745.90M94.91%-3.18%-139.12%
56
Neutral
C$454.35M-3581.90%8.40%-137.80%
50
Neutral
C$578.17M-6.14%3.79%9.94%-147.16%
45
Neutral
$18.95M175.81%-14.72%-99.07%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CGX
Cineplex
11.56
4.09
54.75%
TSE:WILD
WildBrain
2.07
1.07
107.00%
TSE:CJR.B
Corus Entertainment
0.10
-0.37
-79.35%
TSE:RAY.B
Stingray Dgt Vary SV
7.92
0.59
8.05%
TSE:RAY.A
Stingray Digit SV
8.27
0.75
9.97%
TSE:CGO
Cogeco Inc. SV
66.49
19.09
40.27%

Cineplex Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
Cineplex Shareholders Approve All 2025 Meeting Proposals
Positive
May 21, 2025

Cineplex announced that all items of business at its 2025 Annual and Special Meeting of Shareholders were approved, including the election of directors, appointment of auditors, and an increase in shares for its Omnibus Equity Incentive Plan. These approvals reflect shareholder confidence and support for Cineplex’s strategic direction, potentially strengthening its position in the entertainment industry and impacting stakeholders positively.

The most recent analyst rating on (TSE:CGX) stock is a Buy with a C$12.50 price target. To see the full list of analyst forecasts on Cineplex stock, see the TSE:CGX Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Cineplex Reports Q1 2025 Financial Results Amid Revenue Decline and Optimistic Outlook
Neutral
May 9, 2025

Cineplex reported its financial results for the first quarter of 2025, showing a decline in total revenues by 10.3% compared to the previous year, with a net loss from continuing operations of $36.6 million. Despite the softer performance in March, the company experienced growth in cinema media and digital media revenues, driven by increased advertising interest and the expansion of its digital out-of-home network. The company is optimistic about future growth due to a strong film slate and the resolution of industry strikes, which is expected to enhance shareholder value.

Business Operations and StrategyFinancial Disclosures
Cineplex Reports Q1 2025 Financial Results with Optimism for Future Growth
Positive
May 9, 2025

Cineplex reported its financial results for the first quarter of 2025, highlighting a revenue of $264.3 million despite a softer performance in March. The company entertained 8.4 million moviegoers and achieved a record concession per patron. Notably, cinema advertising saw a 38% increase in media revenues, and digital media revenue grew by 26.5%, driven by an expanded digital out-of-home network. The company also reported a record quarterly location-based entertainment revenue increase of 10.5%. Despite a net loss from continuing operations, Cineplex remains optimistic about future growth, buoyed by a strong film slate and industry momentum.

Financial Disclosures
Cineplex to Announce Q1 2025 Earnings and Host Webcast
Neutral
Apr 10, 2025

Cineplex Inc. has announced that it will release its first quarter 2025 financial results on May 9, 2025, followed by an earnings webcast hosted by its CEO and CFO. This announcement is significant for stakeholders as it provides insights into the company’s financial health and strategic direction in the competitive entertainment industry.

Business Operations and StrategyFinancial Disclosures
Cineplex Sees Record-Breaking Box Office Success with A Minecraft Movie
Positive
Apr 8, 2025

Cineplex reported box office revenues of $29.5 million for March 2025, with Disney’s Snow White and Mickey 17 leading the month’s box office. The company experienced a significant impact from the release of A Minecraft Movie in April, marking the biggest domestic debut of 2025 and the best in history for a video game adaptation. This success has already surpassed half of March’s total box office revenue within the first week of April. The strong performance of A Minecraft Movie and a promising lineup for Q2, including titles like Thunderbolts and Mission Impossible – The Final Reckoning, are expected to drive further audience engagement and revenue growth.

Business Operations and StrategyFinancial Disclosures
Cineplex Achieves Strong February Box Office Growth
Positive
Mar 11, 2025

Cineplex reported February 2025 box office revenues of $34.9 million, a 124% increase compared to February 2024. The company’s international content strategy contributed significantly, with international films accounting for 24% of the month’s box office. Notably, ‘Ne Zha 2’ became the highest-grossing animated film globally, highlighting Cineplex’s strong market presence and strategic execution. This performance underscores Cineplex’s robust positioning in the entertainment industry and its ability to attract audiences despite challenging conditions, such as the heavy snowstorm during the release of ‘Captain America: Brave New World’.

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.