Moviegoers watch the movie Ne Zha 2 at IMAX GT Cinema on February 23, 2025 in Guiyang, Guizhou Province of China.
China News Service | China News Service | Getty Images
Wall Street is buzzing following reports of that IMAX evaluates sales.
Shares of the theater technology company rose nearly 14% on Friday on speculation about potential buyers. A source familiar with the company told CNBC that IMAX has held “initial discussions” through consultants, but no official announcements have been made by the company.
The CNBC source spoke on condition of anonymity because of the confidential nature of the discussions. The Wall Street Journal first reported on the potential sale process.
While IMAX may not go ahead with the sale, CEO Rich Gelfond has left the door open for a possible acquisition. In December, he told shareholders during the company’s investor day that IMAX is “an incredibly important player, either as a publicly traded company or as part of a larger company.”
Wall Street analysts broadly see IMAX as an attractive property that could find interest from a variety of businesses, from Hollywood studios and theater partners to fellow technology companies. Several commentators have written that IMAX is currently underrated.
“IMAX is a rare combination of a globally recognized premium brand, a light asset licensing model, and a growing revenue profile,” wrote Equity Research Senior Vice President Alicia Reese in a research note published Friday. “IMAX is trading at a discount to what we believe the business is worth as a standalone business, let alone a strategic acquisition objective.”
As of Friday afternoon, IMAX shares were trading at around $39 each for a market capitalization of about $2.1 billion.
“A potential buyer would be buying one of the most secure forms of entertainment for the equivalent of a collection error on the balance sheet of any major studio or technology platform,” Reese wrote.
Who can buy IMAX
Reese suggested that the most likely suitors for IMAX would include private equity, Netflix, an apple again Sony.
A private equity would avoid any potential conflict issues, as there would be no competing interests for the screens, he noted.
Netflix, on the other hand, does not rely on theatrical releases as part of its core programming strategy, so its conflict of interest would be less than that of traditional Hollywood studios. Additionally, having IMAX will give any filmmaker who signs on to work with Netflix the opportunity for prime theatrical runs and can serve as a “powerful recruiting tool,” according to Reese.
As for Apple and Sony, both companies have strong technology businesses in addition to theatrical content and broadcasting. However, Sony does not have its own streaming platform, while Apple has AppleTV.
“We would be surprised if any of the major Hollywood studios pursue an IMAX acquisition given the competition from other studios for key IMAX windows (and the possibility that a studio may not want to share an office with another studio),” Eric Wold, senior director of equity research at Texas Capital Securities, wrote in a note to investors published Thursday. “By the same token, we don’t believe any of the major exhibition regions would want another region to manage the IMAX release slate and share in the box office revenue.”
The pool of potential buyers could be much wider, according to Mike Hickey, an analyst at Benchmark equity research.
“We believe that the potential consumer space is unusually open because IMAX operates less like a traditional theater chain and more like a platform for premium entertainment technology,” he wrote in a paper published Friday. “Strategic candidates include Sony, Apple, Amazon, Disney, Comcast/NBCUniversal, Netflix, Sphere Entertainment, and Cinépolis, as well as privately funded entertainment investors.
Why buy IMAX
Last year, IMAX generated a record 1.28 billion dollars at the global box office, an increase of more than 40% over 2024 and 13% higher than its previous record set in 2019.
Wold projects revenue of $448 million in 2026, higher than the $396 million the company collected in 2019. In addition, he expects adjusted profit to reach $197 million, up from $149 million in 2019.
However, while IMAX performed very well in its 2019 metrics, its ratings have not returned to pre-pandemic levels, Wold noted. He also said his price for the company is $53 a share.
IMAX hit a 52-week high in late February, trading at $43.16 a share, but the stock fell following tough comparisons for the first quarter of 2025, including the record-breaking performance of China’s “Ne Zha 2.”
Additionally, the company has lost Greta Gerwig’s “Narnia” film since the Thanksgiving holiday following a scheduled injury that delayed production, resulting in a large gap in the calendar. IMAX has since replaced the film with David Fincher’s “The Adventures of Cliff Booth,” based on the breakout character from Quentin Tarantino’s “Once Upon a Time in Hollywood.”
The company still has it Universal and Christopher Nolan’s “The Odyssey” and Warner Bros.‘ and Denis Villeneuve’s “Dune: Part Three,” due out in July and December, respectively, are both expected to generate the bulk of box office sales from IMAX screenings. That’s more than Disney’s “Toy Story 5” and “Moana,” with Warner Bros.’ “Supergirl,” “The Hunger Games: Mockingjay” for Lionsgate and “Minions & Monsters” for Universal.
“By 2027, the company has recorded at least ten IMAX titles, including Narnia and a good mix of basic franchises (Star Wars, Superman, Batman) and other films such as ‘Thomas Crown Affair’ and ‘Miami Vice’,” wrote Steve Frankel, Rosenblatt’s senior research analyst, in a paper published on Friday. “Beyond Hollywood, the company’s slate of local language titles continues to grow, including many titles filmed for IMAX and other content, such as live coverage of F1 races, continues to fill gaps in the schedule.”
IMAX content “recorded for IMAX” is growing rapidly and is expected to grow financially by 2028. Moviegoers are drawn to titles shot on IMAX cameras with the intention of being shown on the biggest, most impressive screens. Past titles include Nolan’s “Oppenheimer,” James Cameron’s films and Disney’s Avatar, as well as entries for the Marvel Cinematic Universe and DC Studios.
But IMAX is also differentiating across the Hollywood landscape. Internationally, it has partnered with China, Japan and South Korea to test local language content. By doing so, the company has reduced its dependence on any one market or single source of content, Reese noted.
The company is also actively growing. About 160 to 175 IMAX screens are expected to be installed by 2026, with construction contracts for several hundred already in place, the company told CNBC last year.
“We continue to be believers in the IMAX story,” Frankel wrote. “The combination of consumers’ ongoing transition to premium viewing experiences, the company’s growing influence with leading filmmakers and the film slate that has diversified beyond the Hollywood tentpoles to include local languages and other content, sets the stage for strong box office growth and margin expansion.”
