Cinemark (NYSE:CNK) Shares Gap Up - Here's Why

Key Points

• Cinemark shares gapped up — the stock opened at $29.68 versus a prior close of $28.48 and last traded around $29.19 with 44,438 shares changing hands.
• Analyst outlook is mixed-to-positive: several firms (JPMorgan, Wells Fargo, Moffett Nathanson) raised ratings/targets while Goldman Sachs remains a seller; the consensus is a Moderate Buy with a $32.77 average target.
• The company recently missed quarterly estimates (EPS $0.16 vs. $0.24 expected; revenue $776.3M vs. $778.4M), carries a high debt-to-equity ratio (4.74), and pays a $0.09 quarterly dividend (~1.2% yield).

Cinemark Holdings Inc (NYSE:CNK - Get Free Report)'s stock price gapped up before the market opened on Tuesday . The stock had previously closed at $28.48, but opened at $29.68. Cinemark shares last traded at $29.1890, with a volume of 44,438 shares traded.

Analyst Ratings Changes

Several research analysts have recently issued reports on the stock. JPMorgan Chase & Co. raised their target price on shares of Cinemark from $31.00 to $35.00 and gave the company an "overweight" rating in a research note on Wednesday, April 8th. Macquarie Infrastructure dropped their price target on shares of Cinemark from $36.00 to $34.00 and set an "outperform" rating for the company in a research note on Thursday, January 15th. The Goldman Sachs Group reaffirmed a "sell" rating and issued a $22.00 price objective on shares of Cinemark in a research note on Thursday, February 19th. Wells Fargo & Company lifted their target price on shares of Cinemark from $32.00 to $36.00 and gave the stock an "overweight" rating in a report on Thursday, April 9th. Finally, Moffett Nathanson upgraded shares of Cinemark from a "neutral" rating to a "buy" rating and set a $30.00 target price for the company in a research report on Tuesday, January 20th. Ten equities research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, Cinemark presently has an average rating of "Moderate Buy" and a consensus target price of $32.77.

Cinemark Price Performance

The company has a debt-to-equity ratio of 4.74, a quick ratio of 0.67 and a current ratio of 0.71. The company has a market capitalization of $3.42 billion, a price-to-earnings ratio of 33.64 and a beta of 1.09. The company has a 50-day moving average price of $28.03 and a 200-day moving average price of $26.34.

Cinemark (NYSE:CNK - Get Free Report) last announced its quarterly earnings results on Wednesday, February 18th. The company reported $0.16 earnings per share for the quarter, missing analysts' consensus estimates of $0.24 by ($0.08). The firm had revenue of $776.30 million during the quarter, compared to analyst estimates of $778.41 million. Cinemark had a net margin of 4.44% and a return on equity of 34.11%. The business's revenue was down 4.7% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.33 earnings per share. On average, equities research analysts expect that Cinemark Holdings Inc will post 2.1 EPS for the current fiscal year.

Cinemark Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, March 17th. Stockholders of record on Tuesday, March 3rd were given a dividend of $0.09 per share. This represents a $0.36 dividend on an annualized basis and a dividend yield of 1.2%. The ex-dividend date of this dividend was Tuesday, March 3rd. Cinemark's dividend payout ratio (DPR) is currently 41.38%.

Insider Activity

In related news, EVP Melissa Thomas sold 7,944 shares of the company's stock in a transaction on Wednesday, February 4th. The shares were sold at an average price of $26.05, for a total value of $206,941.20. Following the completion of the sale, the executive vice president owned 159,416 shares in the company, valued at $4,152,786.80. This represents a 4.75% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. 2.40% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Orbis Allan Gray Ltd raised its position in shares of Cinemark by 31.0% during the fourth quarter. Orbis Allan Gray Ltd now owns 15,057,911 shares of the company's stock worth $349,946,000 after purchasing an additional 3,563,810 shares during the period. Wellington Management Group LLP grew its position in shares of Cinemark by 8.4% in the 4th quarter. Wellington Management Group LLP now owns 9,536,900 shares of the company's stock valued at $221,638,000 after purchasing an additional 742,307 shares during the period. Lavaca Capital LLC bought a new stake in Cinemark during the 4th quarter worth approximately $133,045,000. State Street Corp increased its stake in Cinemark by 1.5% during the 4th quarter. State Street Corp now owns 3,950,606 shares of the company's stock worth $91,812,000 after purchasing an additional 60,176 shares in the last quarter. Finally, Alyeska Investment Group L.P. acquired a new stake in Cinemark during the 4th quarter worth approximately $55,296,000.

About Cinemark

Cinemark Holdings, Inc NYSE: CNK is a leading theatrical exhibitor that acquires, develops and operates motion picture theatres under the Cinemark® brand in the United States and Latin America. The company's core business involves the presentation of first-run feature films coupled with an array of in‐theatre services, including concessions, premium auditoriums and loyalty programs. Cinemark's exhibition portfolio encompasses both corporate‐owned and franchised complexes, offering moviegoers a range of experiences from standard screens to large‐format halls.

The company's product offerings extend beyond ticket sales to include an assortment of concession items, such as popcorn, fountain beverages, candy and specialty snacks, as well as bar and lounge concepts in select locations.

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