Cineplex (TSX:CGX) is a Toronto-based company that operates as an entertainment and media company
in Canada and around the world. It boasts a dominant position as a cinema operator across Canada.
However, that also meant that it took a massive hit during the COVID-19 pandemic in 2020 and 2021.
Shares of this TSX stock have dropped 33% in 2022 as of close on October 26. The stock is now down
34% in the year-to-date period. Is Cineplex worth buying on the dip?
The company unveiled its second quarter fiscal 2022 earnings on August 11. Total revenues shot up
438% year-over-year to $349 million. Meanwhile, theatre attendance soared 866% to 11.1 million. It
enjoyed a massive uptick from the previous year as it was able to resume full operation. Cineplex
reported adjusted EBITDA of $77.9 million compared to an adjusted EBITDA loss of $16.9 million in the
second quarter of fiscal 2021.
Investors have reason for optimism ahead of a solid movie release slate for the rest of 2022. In
November, Cineplex should host top releases like Black Panther: Wakanda Forever and The Fabelmans .
This should give attendance a further boost in the second-last month of this year.
Cineplex stock fell into technically oversold territory in early September. Its shares are still trading in
favourable levels compared to its industry peers. The company is on track for strong revenue growth as
conditions continue to normalize in this space. Cineplex is worth snatching up after suffering sharp
losses in the year-to-date period.
