Value
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.0 |
| P/S | 6.6 |
| EV/EBITDA | 0.7 |
| Fwd P/E | 6.3 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 20.4x
- ▸PEG: 0.27
IMAX · Why this verdict
Why Imax (IMAX) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow runs at 277% of reported net income, meaning the business generates nearly three times more cash than its accounting earnings suggest — a signal of strong working-capital dynamics and low maintenance capital intensity. Quality | Free cash flow as a proportion of net income remains above 150% over the next four reported quarters, sustaining the cash generation advantage. | →Stable |
| CounterOperating margins and return on assets are modest, and the financial health score's quality components related to return on assets and return on equity are below mid-range — the strong FCF conversion may reflect timing effects rather than a permanent structural advantage. | ||
The two most recent quarters both missed consensus estimates — with the most recent quarter falling 18% short and the prior quarter nearly entirely missing — after two strong beats in the preceding two periods, raising a credibility question around near-term guidance. Earnings | EPS beats consensus for 3 consecutive quarters, demonstrating that the miss pattern has reversed and estimates are once again anchored to achievable levels. | →Stable |
| CounterThe two quarters prior to the recent misses beat by 14% and 69% respectively, and the average surprise across all four periods remains negative only modestly — suggesting the business can generate meaningful upside relative to expectations when execution aligns. | ||
Revenue has been declining at approximately 6% on an annualized basis, indicating the top line is shrinking — a constraint on the path to sustained earnings growth that cannot be offset by cash conversion efficiency alone. Growth | Revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters, confirming a durable recovery in the top line. | →Stable |
| CounterEarnings growth scores are at the high end of the range despite revenue contraction, suggesting that the company has been able to expand margins or reduce costs at a rate that partially offsets the revenue headwind — a pattern that could continue in the near term. | ||
Short sellers hold 18% of the float — one of the higher short interest levels in the market — alongside implied volatility of 89%, reflecting substantial institutional conviction that the stock is likely to decline from current levels. Risk | Short interest falls below 10% of float within 12 months, reflecting diminished bearish conviction as execution improves. | →Stable |
| CounterElevated short interest is a double-edged signal: a positive earnings surprise or announced deal could trigger a rapid short-covering rally, making the high short float a potential source of outsized upside if the bears are wrong. | ||
Free cash flow runs at 277% of reported net income, meaning the business generates nearly three times more cash than its accounting earnings suggest — a signal of strong working-capital dynamics and low maintenance capital intensity.
→StableQuality
- Expectation
- Free cash flow as a proportion of net income remains above 150% over the next four reported quarters, sustaining the cash generation advantage.
CounterOperating margins and return on assets are modest, and the financial health score's quality components related to return on assets and return on equity are below mid-range — the strong FCF conversion may reflect timing effects rather than a permanent structural advantage.
The two most recent quarters both missed consensus estimates — with the most recent quarter falling 18% short and the prior quarter nearly entirely missing — after two strong beats in the preceding two periods, raising a credibility question around near-term guidance.
→StableEarnings
- Expectation
- EPS beats consensus for 3 consecutive quarters, demonstrating that the miss pattern has reversed and estimates are once again anchored to achievable levels.
CounterThe two quarters prior to the recent misses beat by 14% and 69% respectively, and the average surprise across all four periods remains negative only modestly — suggesting the business can generate meaningful upside relative to expectations when execution aligns.
Revenue has been declining at approximately 6% on an annualized basis, indicating the top line is shrinking — a constraint on the path to sustained earnings growth that cannot be offset by cash conversion efficiency alone.
→StableGrowth
- Expectation
- Revenue growth turns positive and exceeds 5% year-over-year for 2 consecutive quarters, confirming a durable recovery in the top line.
CounterEarnings growth scores are at the high end of the range despite revenue contraction, suggesting that the company has been able to expand margins or reduce costs at a rate that partially offsets the revenue headwind — a pattern that could continue in the near term.
Short sellers hold 18% of the float — one of the higher short interest levels in the market — alongside implied volatility of 89%, reflecting substantial institutional conviction that the stock is likely to decline from current levels.
→StableRisk
- Expectation
- Short interest falls below 10% of float within 12 months, reflecting diminished bearish conviction as execution improves.
CounterElevated short interest is a double-edged signal: a positive earnings surprise or announced deal could trigger a rapid short-covering rally, making the high short float a potential source of outsized upside if the bears are wrong.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Exceptional free cash flow conversion and strong analyst sentiment stand out in an otherwise challenged picture: two consecutive and sizable earnings misses, revenue contracting at roughly 6%, an 18% short float, and the stock trading just 30 basis points below its near-term resistance target leave almost no reward for the risk of a new position at the current price.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.6 |
| ROA | 4.2 |
| Gross margin | 7.8 |
| Op margin | 4.9 |
| Net margin | 4.5 |
| Current ratio | 8.4 |
| FCF quality | 10.0 |
| Moat | 5.4 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 276% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
5.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -6%
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 6.8 |
- ▸Oversold in uptrend (RSI 30)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.3 |
| Price target | 8.4 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 28%
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Heavy insider selling — $12,715,055 (0.580% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.3 |
| quality rank | 7.1 |
| growth rank | 1.2 |
Technical
8.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.5 |
| 52w position | 6.4 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.5 |
| days to cover | 5.0 |
| volatility | 0.9 |
| put call | 10.0 |
| implied vol | 1.7 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 6.9 |
- ▸High short interest: 17%
- ▸High IV: 70%
- ▸Above max pain $29
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (4)
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.0<4.5
- ASYMMETRY:1.2<1.5@spot
- INSIDER:0.58%=HEAVY
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.19
Upside
+11.0%
Downside
9.3%
Sizing output
AVOID
SetupOversold Bounce — Oversold RSI 30, near Bollinger lower, volume surge
EdgeCatalyst-Driven — Earnings in 25d with 4/4 beat streak
SuitabilityAggressive — MCap $2.2B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: NEWS_EVENTS:NONE_RECENT. Top dim: Technical at 8.6; weakest: Insider at 3.0. No conviction either direction.
The strongest dimensions are Technical at 8.6, Catalyst at 7.5, and Sentiment at 7.4; the weakest are Insider at 3.0, Peer rank at 3.9, and Momentum at 4.0. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.19 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Free Cashflow Conversion
Trip ifFree cash flow falls below 150% of net income for 2 consecutive reported quarters, a material deterioration from the current 277% level.
- P2Consecutive Large Earnings Misses
Trip ifEPS exceeds consensus for 3 consecutive quarters, confirming the miss pattern has ended.
- P3Revenue Contracting Six Percent
Trip ifRevenue growth turns positive and exceeds 5% year-over-year for 2 consecutive reported quarters.
- P4High Short Interest Speculative Risk
Trip ifShort interest falls below 10% of float, indicating bearish conviction has materially diminished.