Cineplex (TSE:CGX) Issues Earnings Results

Cineplex (TSE:CGX) posted its earnings results on Friday. The company reported C$0.34 EPS for the quarter, FiscalAI reports. Cineplex had a positive return on equity of 14.84% and a negative net margin of 0.96%. The firm had revenue of C$440.20 million for the quarter.

Here are the key takeaways from Cineplex’s conference call:

• Record results and stronger finances: Q3 revenue reached CAD 440.2 million, adjusted EBITDAaL more than doubled to CAD 70.7 million, and adjusted free cash flow more than tripled to CAD 52.9 million. Leverage fell to 2.9 times, within the company’s target range.
• Box office momentum and content outlook are encouraging: Cineplex’s Q3 box office revenue rose 35.2%, outperforming the domestic industry, and year-to-date box office revenue through October was up 25%. Management cited a strong year-end slate and a constructive outlook for 2027, while noting film results can be unpredictable.
• Media and location-based entertainment face near-term pressure: Media revenue was flat, with Q4 weighed down by shifted advertiser spending, economic uncertainty, and a tough comparison with pharmaceutical advertising last year. Location-based entertainment revenue declined 1.7% amid cautious consumer spending, although segment EBITDA improved.
• The strategic review remains ongoing, with management considering a broad range of options but providing no update or timeline. Reaching its leverage target gives Cineplex more flexibility to consider capital returns or other uses of cash, but no decision was announced.

Cineplex Price Performance

TSE CGX opened at C$14.25 on Friday. Cineplex has a 12 month low of C$9.15 and a 12 month high of C$14.32. The company has a debt-to-equity ratio of -1,865.57, a current ratio of 0.44 and a quick ratio of 0.22. The firm has a market capitalization of C$897.79 million, a PE ratio of -71.25, a P/E/G ratio of 0.30 and a beta of 0.15. The company’s 50 day simple moving average is C$12.64 and its 200 day simple moving average is C$11.49.

Wall Street Analysts Forecast Growth

Several analysts have weighed in on the company. Scotiabank lifted their target price on Cineplex from C$12.00 to C$13.50 and gave the company a “sector outperform” rating in a research note on Wednesday, August 12th. RBC Dominion Securities increased their price target on Cineplex from C$15.00 to C$16.00 and gave the stock an “outperform” rating in a research note on Wednesday, October 28th. Canaccord Genuity Group increased their price target on Cineplex from C$11.50 to C$12.25 and gave the stock a “hold” rating in a research note on Monday, October 19th. TD Securities raised Cineplex to a “strong-buy” rating in a report on Friday, July 24th. Finally, National Bank Financial lifted their price objective on shares of Cineplex from C$13.50 to C$14.00 and gave the company an “outperform” rating in a research note on Wednesday, August 12th. One analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and one has assigned a Hold rating to the company. Based on data from MarketBeat, the stock currently has an average rating of “Buy” and an average price target of C$14.46.

About Cineplex

Cineplex (TSX:CGX) is a top-tier Canadian brand that operates in the Film Entertainment and Content, Amusement and Leisure, and Media sectors. Cineplex offers a unique escape from the everyday to millions of guests through its circuit of 169 movie theatres and location-based entertainment venues. In addition to being Canada’s largest and most innovative film exhibitor, the company operates Canada’s favourite destination for ‘Eats & Entertainment’ (The Rec Room), complexes specially designed for teens and families (Playdium), and an entertainment concept that brings movies, amusement gaming, dining, and live performances together under one roof (Cineplex Junxion).