While investors have spent most of 2025 fixated on artificial intelligence stocks and the magnificent seven, one entertainment technology company has been quietly delivering exceptional returns that have flown under the radar.
IMAX Corporation (NYSE: IMAX) has posted a year-to-date gain of over 41%, outperforming not only the S&P 500’s 16.6% return but also surpassing the AI darling , which has returned approximately 33-35% over the same period.
The premium cinema technology company’s shares surged nearly 8.5% in a single session following its December 4th investor day, where management unveiled ambitious three-year financial targets that sent a clear signal to Wall Street: IMAX’s best days may still lie ahead.
Overview of IMAX Stock’s Recent Rise and the Forces Behind It
IMAX shares closed at $36.23 on December 5th, 2025, gaining 8.44% in a single day after management shared bullish three-year guidance at its investor day event. The company projected cumulative average revenue growth in the high single-digits to low double-digits range, with adjusted earnings per share expected to expand at twice the rate of revenue growth.
Perhaps most impressive, IMAX announced its adjusted EBITDA margin would grow to over 50%, translating to significantly higher operating cash flows and demonstrating the powerful operating leverage embedded in its business model.
The momentum behind IMAX’s rally extends well beyond a single investor presentation. The company recently shattered its Thanksgiving box office record, generating $40.8 million globally during the five-day holiday period – a stunning 70% increase over the previous record set just one year earlier.
Powered by Disney’s “Zootopia 2” and Universal’s “Wicked: For Good,” this performance marked the best global November weekend in IMAX history. CEO Rich Gelfond highlighted family audiences as a strong growth opportunity, noting that the record weekend underscores the progress IMAX has made connecting with parents and children.
The company’s network expansion has also been accelerating faster than analysts expected, particularly in regions where revenue per screen exceeds the global average. With 1,829 IMAX systems now operating across 89 countries and territories, and a substantial backlog of 478 systems including 341 new installations and 137 upgrades, IMAX has built a significant runway for continued growth. The recent partnership with Cinemark Holdings to introduce IMAX with Laser and 70mm film systems across 17 locations in the United States and South America further demonstrates the appetite for premium format experiences.
The Overlooked Outperformer: Why Most Investors Missed This Rally
Despite its impressive performance, IMAX’s stock rally has received remarkably little attention compared to the constant coverage lavished on technology giants.
The stock’s 41.52% year-to-date return has outpaced the S&P 500 by a factor of nearly 2.5 times, and its one-year return of 41.30% has beaten the benchmark’s 12.66% by an even wider margin. Over a three-year horizon, IMAX has delivered a remarkable 104.46% return versus the S&P 500’s 68.41%, and its five-year return of 146.46% nearly doubles the market’s 85.37% gain.
What makes this outperformance particularly noteworthy is that IMAX accomplished it with a beta of just 0.41, meaning the stock exhibits less than half the volatility of the broader market. This low-volatility profile combined with market-beating returns represents an attractive risk-adjusted performance that has gone largely unrecognized.
Goldman Sachs analyst Stephen Laszczyk, who had maintained a bearish stance on IMAX for an extended period, recently upgraded the stock to neutral from sell and raised his price target from $22 to $34, citing the growing strategic value of IMAX within the media industry.
The catalyst for continued growth appears firmly in place. Avatar: Fire and Ash, James Cameron’s third installment in the blockbuster franchise, is set for theatrical release on December 19th, 2025. Early reactions from premiere screenings have been overwhelmingly positive, with critics praising the film as a visual masterpiece that demands to be seen in IMAX.
Box office projections suggest an opening weekend of $110 million or more, with some forecasts expecting it to exceed the $134 million debut of Avatar: The Way of Water. Given IMAX’s historically strong indexing to Avatar films, this release could provide a significant year-end boost.
Stock Highlights and Insights: Key Metrics and the Path Forward
IMAX currently trades at a market capitalization of approximately $1.95 billion, with a trailing P/E ratio of 51.03 and a forward P/E of 20.62 based on analyst expectations for accelerating earnings growth. The stock recently touched a 52-week high of $37.78 and is trading near the upper end of its range of $20.48 to $37.78. Analysts maintain a consensus “Buy” recommendation with an average price target of $38.62 and a high target of $42.00, suggesting potential upside from current levels.
The company’s financial health metrics paint an encouraging picture. IMAX holds $143.11 million in cash, operates with a total debt-to-equity ratio of 58.90%, and generates levered free cash flow of $74.46 million on a trailing twelve-month basis. Return on equity stands at 12.40%, while the profit margin of 10.47% demonstrates the company’s ability to convert revenue into earnings. The recent completion of a $250 million convertible senior notes offering at a 0.75% interest rate, with proceeds used to refinance existing debt and fund capped call transactions, further strengthens the balance sheet.
Looking ahead to 2026 and beyond, several factors support the case for continued momentum. The film slate remains robust with major releases including Christopher Nolan’s “The Odyssey” scheduled for July 2026, while local language content and alternative programming continue to drive incremental growth.
Management’s projection of mid-single-digit annual network growth, combined with high single-digit to double-digit box office growth, provides a framework for sustained revenue expansion.
While valuation concerns exist given the premium multiple, the combination of operating leverage, network expansion, and a content strategy that is clearly resonating with audiences positions IMAX as a compelling play on the resilience of the theatrical experience, one that most investors have yet to fully appreciate.
***
This article was written by Shane Neagle, editor in chief of The Tokenist. To get trade ideas and pre-market insights delivered to your inbox every morning premarket, click here to sign up for Bull Whisper (free), brought to you in partnership with The Tokenist.