Cineplex (TSE:CGX) Announces Earnings Results

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

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 Stock Performance

Shares of TSE CGX traded up C$0.61 during midday trading on Friday, reaching C$14.25. 1,219,842 shares of the stock were exchanged, compared to its average volume of 321,050. Cineplex has a twelve month low of C$9.15 and a twelve month high of C$14.32. The company has a quick ratio of 0.22, a current ratio of 0.44 and a debt-to-equity ratio of -1,865.57. The firm has a market cap of C$897.79 million, a price-to-earnings ratio of -71.25, a PEG ratio of 0.30 and a beta of 0.15. The firm has a 50-day simple moving average of C$12.60 and a two-hundred day simple moving average of C$11.47.

Wall Street Analysts Forecast Growth

CGX has been the topic of several research reports. National Bank Financial lifted their price objective on Cineplex from C$13.50 to C$14.00 and gave the company an “outperform” rating in a research report on Wednesday, August 12th. Scotiabank increased their target price on shares of Cineplex from C$12.00 to C$13.50 and gave the stock a “sector outperform” rating in a report on Wednesday, August 12th. Canaccord Genuity Group boosted their target price on shares of Cineplex from C$11.50 to C$12.25 and gave the stock a “hold” rating in a report on Monday, October 19th. TD Securities raised shares of Cineplex to a “strong-buy” rating in a research note on Friday, July 24th. Finally, 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 report on Wednesday, October 28th. One research analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating and one has issued a Hold rating to the stock. According to MarketBeat.com, the stock has an average rating of “Buy” and an average target price 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).