Cinemark Holdings Inc Cinemark Holdings Inc. Common Stock (CNK)

FairStock Score: 28/100 — RISKY

Key Financials

Strengths

• Generates $146 million in annual free cash flow (4.3% yield on market cap)
• High return on equity of 27.8% demonstrating efficient capital deployment

Concerns

• Trades significantly above Graham Number ($9) with negative 218% margin of safety—limited downside protection
• High leverage at 7.23x debt-to-equity increases financial risk and interest expense burden
• Revenue declining at 4.7% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 0.6 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Cinemark Holdings Inc Cinemark Holdings Inc. Common Stock is a small-cap communication services company valued at $3.4 billion. The business generates $3.1 billion in annual revenue with a 1.1% net margin and $146 million in free cash flow. From a quality standpoint, Cinemark shows distressed Altman Z-Score of 0.6 warrants caution and strong 28% ROE. On valuation, the stock is trading at a premium 27.5x earnings, with trades far above its Graham Number ($9) with no margin of safety. Growth dynamics show revenue growing at -4.7% and profit growth of -33.5%. The 1.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 28/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $146 million in annual free cash flow (4.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 7.2x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer