Stock Traders Buy Large Volume of Call Options on IMAX (NYSE:IMAX)

Key Points

• Unusually heavy bullish options activity hit IMAX, with traders buying 3,458 call options—about 241% above the average daily volume—suggesting increased near-term upside speculation.
• IMAX shares rose 9.4% to $42.98 on Thursday, with trading volume also running above average as investors reacted to the company’s recent performance and news flow.
• Fundamentals and analyst sentiment remain supportive: IMAX beat second-quarter earnings and revenue estimates, and Wall Street maintains a Moderate Buy consensus with an average target price of $47.30.

IMAX Corporation (NYSE:IMAX - Get Free Report) was the target of unusually large options trading activity on Thursday. Traders bought 3,458 call options on the company. This is an increase of approximately 241% compared to the average daily volume of 1,014 call options.

Wall Street Analyst Weigh In

A number of brokerages recently commented on IMAX. Wells Fargo & Company reaffirmed an "equal weight" rating and issued a $41.00 target price (down from $47.00) on shares of IMAX in a report on Thursday, July 16th. The Goldman Sachs Group set a $40.00 price target on shares of IMAX in a report on Thursday, July 9th. Rosenblatt Securities reiterated a "buy" rating and set a $47.00 target price on shares of IMAX in a research report on Monday. Barrington Research lifted their price target on IMAX from $42.00 to $46.00 and gave the stock an "outperform" rating in a research report on Friday, May 1st. Finally, Benchmark reissued a "buy" rating on shares of IMAX in a research note on Monday, June 22nd. Nine investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company's stock. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $47.30.

IMAX Trading Up 9.4%

Shares of NYSE IMAX traded up $3.68 during mid-day trading on Thursday, reaching $42.98. The company had a trading volume of 1,581,046 shares, compared to its average volume of 1,122,476. The stock has a market cap of $2.36 billion, a price-to-earnings ratio of 66.85, a price-to-earnings-growth ratio of 1.39 and a beta of 0.37. IMAX has a 52 week low of $24.20 and a 52 week high of $45.52. The business's 50-day moving average is $39.60 and its 200-day moving average is $37.94.

IMAX (NYSE:IMAX - Get Free Report) last announced its quarterly earnings data on Thursday, July 23rd. The company reported $0.43 earnings per share for the quarter, beating analysts' consensus estimates of $0.28 by $0.15. The company had revenue of $102.84 million during the quarter, compared to analyst estimates of $94.69 million. IMAX had a net margin of 9.08% and a return on equity of 13.61%. The firm's revenue for the quarter was up 12.2% on a year-over-year basis. During the same quarter last year, the business posted $0.26 EPS. As a group, equities research analysts forecast that IMAX will post 1.3 earnings per share for the current year.

IMAX News Summary

Here are the key news stories impacting IMAX this week:

• Positive Sentiment: IMAX beat second-quarter expectations, reporting EPS of $0.43 versus the $0.28 consensus and revenue of $102.84 million versus $94.69 million expected. The company also posted 12.2% year-over-year revenue growth, reinforcing momentum in its core business. Article Title
• Positive Sentiment: Management highlighted The Odyssey as a potentially “transformational” event for IMAX, with the film’s debut already generating unusually strong IMAX ticket sales and broad media attention around the company’s 70mm and premium-large-format exposure. Article Title
• Positive Sentiment: Heavy call-option activity suggests traders are positioning for more upside, with call volume jumping well above normal levels. That kind of activity often signals bullish sentiment around a stock’s near-term outlook.
• Neutral Sentiment: Several articles focused on the record-breaking opening weekend for The Odyssey, including strong IMAX ticket participation and premium-screen demand. These stories are supportive for the brand, but they are more indirect than the earnings results in terms of immediate stock impact.
• Neutral Sentiment: Rosenblatt Securities reiterated a “Buy” rating, which adds a favorable analyst backdrop, though it is not as market-moving as the quarterly beat.

Insider Activity

In related news, CEO Richard L. Gelfond sold 8,943 shares of the company's stock in a transaction on Monday, April 27th. The stock was sold at an average price of $37.33, for a total transaction of $333,842.19. Following the completion of the sale, the chief executive officer owned 765,002 shares in the company, valued at approximately $28,557,524.66. This represents a 1.16% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 20.55% of the stock is currently owned by company insiders.

Institutional Trading of IMAX

Several institutional investors and hedge funds have recently modified their holdings of IMAX. Caitong International Asset Management Co. Ltd grew its stake in IMAX by 28.7% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 1,489 shares of the company's stock worth $55,000 after purchasing an additional 332 shares in the last quarter. GAMMA Investing LLC raised its position in IMAX by 22.3% during the 4th quarter. GAMMA Investing LLC now owns 1,874 shares of the company's stock valued at $69,000 after purchasing an additional 342 shares in the last quarter. ProShare Advisors LLC lifted its holdings in shares of IMAX by 6.8% in the 4th quarter. ProShare Advisors LLC now owns 8,000 shares of the company's stock worth $296,000 after buying an additional 511 shares during the period. Charles Schwab Investment Management Inc. lifted its holdings in shares of IMAX by 0.5% in the 4th quarter. Charles Schwab Investment Management Inc. now owns 108,781 shares of the company's stock worth $4,021,000 after buying an additional 546 shares during the period. Finally, Quarry LP grew its position in shares of IMAX by 166.8% during the 4th quarter. Quarry LP now owns 875 shares of the company's stock worth $32,000 after buying an additional 547 shares in the last quarter. Institutional investors own 93.51% of the company's stock.

About IMAX

IMAX Corporation is a global leader in immersive entertainment technologies, specializing in the design, manufacture and distribution of high-resolution cameras, projectors, and proprietary software solutions that enhance both film production and theatrical exhibition. The company licenses its premium large-format system to theatre owners and filmmakers around the world, enabling audiences to experience movies with greater clarity, scale and sound fidelity. IMAX also offers turnkey theatre development services, assisting cinema operators with auditorium design, installation and custom branding to optimize the customer experience.

Founded in 1967 and headquartered in Mississauga, Ontario, IMAX has built a reputation for pioneering film-format innovations, including its patented dual 15-perforation, 70-millimeter projection system.

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