Shares of Cinemark Holdings (NYSE:CNK) climbed 5% on Monday, continuing the movie theater chain’s post-earnings announcement rally.
Image source: Getty Images.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
Soaring profits
Cinemark reported solid third-quarter results last week. Revenue rose 24% year over year to nearly $1.1 billion, driven by an 18% jump in attendance to 64 million patrons.
Moviegoers are also spending more on food and beverages. Worldwide concession revenue per patron increased 5% to $6.50.
Better still, Cinemark’s profits are rising even faster. Net income soared 148% to $123 million. Earnings per share, boosted by stock buybacks, rocketed 160% to $1.04.
“Our ability to translate positive box office momentum from a compelling slate of summer releases into consistent, meaningful earnings growth reflects the strength of our operating model, the effectiveness of our team, and the sustained impact of our strategic initiatives,” CEO Sean Gamble said.
A winning strategy
Cinemark’s focus on premium offerings is helping it win market share and expand its profit margins. Box office for premium large formats like XD, IMAX, and ScreenX leaped 50%. Revenue from motion seats — which move, tilt, and vibrate in synchronization with a movie — jumped 62%.
Cinemark also has one of the healthier balance sheets in the movie theater industry, with $556 million in cash reserves against $1.9 billion of long-term debt, bolstered by more than $300 million of free cash flow over the trailing nine months.
“Looking ahead, we remain highly confident in our long-term growth prospects and value proposition, supported by favorable consumer trends and content dynamics, as well as the distinct advantages we derive from our high-quality circuit, healthy balance sheet, and differentiated competitive position,” Gamble said.
Should you buy stock in Cinemark right now?
Before you buy stock in Cinemark, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cinemark wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $341,966!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,146,819!*
