Moviegoers watch the film Ne Zha 2 at an IMAX GT cinema on February 23, 2025 in Guiyang, China’s Guizhou province.
Chinese Press Service | Chinese Press Service | Getty Images
Wall Street is in turmoil following reports that IMAX explore a sale.
Shares of the movie technology company rose about 14% Friday amid speculation about potential buyers. A source close to the company told CNBC that IMAX has had “preliminary talks” through intermediaries, but no official presentation has been made by the company.
The CNBC source spoke on condition of anonymity due to the confidential nature of the discussions. The Wall Street Journal was first to report the potential sales process.
Although IMAX is not actively seeking a sale, CEO Rich Gelfond has left the door open for a possible buyout. In December, he told shareholders at the company’s investor day that IMAX was “an incredibly valuable player, either as a fully differentiated publicly traded company or as part of a larger company.”
Wall Street analysts generally view IMAX as an attractive asset that could attract interest from a variety of companies, from Hollywood studios and movie theater partners to other technology companies. Several analysts have written that IMAX is currently undervalued.
“IMAX is a rare combination of a globally recognized premium brand, an asset-light licensing model and a structurally growing earnings profile,” Alicia Reese, Wedbush senior vice president of equity research, wrote in a research note released Friday. “IMAX is trading at a lower price than we think the company is worth as a standalone entity, much less as a strategic acquisition target.”
As of midday Friday, IMAX shares were trading at nearly $39 apiece for a market cap of about $2.1 billion.
“A potential acquirer would be purchasing one of the entertainment industry’s most defensible bastions for what amounts to a rounding error on the balance sheet of any major studio or technology platform,” Reese wrote.
Who could buy IMAX
Reese suggested that IMAX’s most likely suitors would include private equity, Netflix, Apple And Sony.
Private equity would avoid any potential conflict issues because there would be no competing interests in the displays, she noted.
Netflix, meanwhile, 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, owning IMAX would offer any filmmaker who signed on to work with Netflix the opportunity to shoot in quality theaters and could act as a “powerful recruiting tool,” according to Reese.
As for Apple and Sony, both companies have strong technology businesses in addition to movie and streaming content. However, Sony does not have its own streaming platform, while Apple owns AppleTV.
“We would be surprised if any of the major Hollywood studios wanted to acquire IMAX given the competition with other studios for key IMAX release windows (and the likelihood that a studio would not want to share the box office with another studio),” wrote Eric Wold, executive director of equity research at Texas Capital Securities, in an investor note released Thursday. “Similarly, we don’t believe any of the major exhibition circuits want another circuit to control the IMAX release slate and share its box office revenue equally.”
The pool of potential buyers could be much larger, according to Benchmark equity research analyst Mike Hickey.
“We believe the universe of potential buyers is unusually broad because IMAX operates less like a traditional movie theater chain and more like a high-end entertainment technology platform,” he wrote in a note released Friday. “Logical strategic candidates include Sony, Apple, Amazon, Disney, Comcast/NBCUniversal, Netflix, Sphere Entertainment, and Cinépolis, alongside state-backed entertainment investors.
Why buy IMAX
Last year, IMAX generated a record $1.28 billion at the global box office, an increase of more than 40% from 2024 and 13% more than its previous record set in 2019.
Wold forecasts revenue of $448 million in 2026, higher than the $396 million the company collected in 2019. Additionally, he expects adjusted profit to reach $197 million, up from $149 million in 2019.
However, even though IMAX is outperforming its 2019 metrics, its valuation has not returned to pre-pandemic levels, Wold noted. He reiterated that his price target for the company is $53 per share.
IMAX hit a 52-week high in late February, trading at $43.16 a share, but the stock fell after tough first-quarter comparisons to 2025, which included the record performance of Chinese film “Ne Zha 2.”
Additionally, the company lost Greta Gerwig’s “Narnia” film over the Thanksgiving holiday following an on-set injury that delayed production, causing a significant gap in the schedule. 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 Universal and “The Odyssey” by Christopher Nolan and Warner Bros.and Denis Villeneuve’s “Dune: Part Three,” set to release in July and December, respectively, both of which are expected to generate a significant portion of box office sales from IMAX screenings. That’s in addition to Disney’s “Toy Story 5” and “Moana,” alongside Warner Bros. “Supergirl,” Lionsgate’s “Hunger Games: Sunrise on the Reaping” and Universal’s “Minions & Monsters.”
“In 2027, the company has shot at least 10 IMAX titles, including Narnia and a good mix of core franchises (Star Wars, Superman, Batman) and other films like ‘The Thomas Crown Affair’ and ‘Miami Vice,'” Steve Frankel, senior research analyst for Rosenblatt, wrote in a note published Friday. “Beyond Hollywood, the company’s portfolio of local language titles continues to expand, including several titles filmed for IMAX and alternative content, such as live broadcasts of F1 races, which continue to fill gaps in the schedule.”
IMAX’s “filmed for IMAX” content is accelerating and is expected to grow significantly through 2028. Movie fans are attracted to titles that were filmed on IMAX cameras with the intention of being projected on larger, more impressive screens. Previous titles include Nolan’s “Oppenheimer,” James Cameron and Disney’s Avatar films, as well as entries in the Marvel and DC Studios cinematic universe.
But IMAX is also diversifying beyond the Hollywood landscape. Internationally, the company has partnered with China, Japan and South Korea to deliver local language content. In doing so, the company reduced its reliance on a single marketplace or content source, Reese noted.
The company is also expanding. About 160 to 175 IMAX systems are expected to be installed in 2026, and contracts to build hundreds more are already in place, the company told CNBC last year.
“We continue to believe in the IMAX story,” Frankel wrote. “The combination of today’s consumer shift toward premium viewing experiences, the company’s growing influence with A-list filmmakers, and a film selection that has diversified beyond Hollywood tentpoles to include local languages and alternative content, paves the way for strong box office growth and margin expansion.”