Imax Corporation Common Stock (IMAX)

FairStock Score: 39/100 — MIXED

Key Financials

Strengths

• Generates $91 million in annual free cash flow (4.7% yield on market cap)
• Solid return on equity of 11.3% above cost of capital
• Revenue growth of 35.1% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($9) with negative 281% margin of safety—limited downside protection

AI Analysis

Imax Corporation Common Stock is a micro-cap communication services company valued at $1.9 billion. The business generates $410 million in annual revenue with a 0.2% net margin and $91 million in free cash flow. From a quality standpoint, Imax shows Altman Z-Score of 2.8 in the grey zone and adequate 11% ROE. On valuation, the stock is commanding a steep 58.1x multiple, with trades far above its Graham Number ($9) with no margin of safety. Growth dynamics show revenue growing at 35.1% and profit growth of -88.0%. Our composite FairStock Score of 39/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Imax's 35% revenue growth trajectory could accelerate as it captures additional market share in the communication services sector. With $91 million in annual free cash flow (4.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 58x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. 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