Buying a stock while it is down can be a smart move, even before the full recovery shows up in the numbers. The market often waits for perfect proof, but the best long-term returns usually come when a business is improving and the share price still looks unloved. That doesn’t mean buying every broken stock on sale, but looking for one where the core business still matters, demand is coming back, and management has a credible path forward.
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CGX
Cineplex (TSX:CGX) fits that setup nicely, down 33% since five-year highs. It’s still the dominant movie theatre operator in Canada, but also more than popcorn and blockbuster nights. It has a growing media business, location-based entertainment through The Rec Room and Playdium, and a loyalty ecosystem that keeps customers in the orbit. That mix gives the company more ways to make money than just ticket sales.
Cineplex stock is also still well below where it has traded in better times. At about $10.51, it sits roughly 17% below its 52-week high of $12.72, and miles below the old Cineworld takeover price from 2020. That gap tells you the market still has doubts. But it also tells you there is room for upside if the recovery keeps moving in the right direction.
Over the last year, Cineplex has had a busy stretch. An activist investor, Windward Management, pushed the company to buy back more stock and sell non-core assets, arguing the theatre business had reached an inflection point. Cineplex stock then sold its digital media business for $70 million in cash, renewed its buyback program, and kept leaning into premium experiences and international content. It also announced a new Playdium location in Vaughan for summer 2026. Those are not flashy moves, but the kind that can slowly rebuild value.
Into earnings
The earnings story looks better than the headline many investors might expect. Cineplex stock reported 2025 revenue of $1.28 billion, up slightly from $1.27 billion in 2024. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $91.6 million from $89.9 million. Net loss improved sharply to $36.9 million from a loss of $104.2 million the year before. That’s not a full victory lap yet, but a real step forward.
The underlying operating trends were solid as well. Annual box office revenue slipped just 0.3%, but box office per patron hit a record $13.29, while concession per patron reached a record $9.72. Premium experiences made up 43.2% of total box office revenue, the highest annual share since 2018, and cinema media revenue rose 13.1%. In short, fewer people may have shown up than in peak periods, but the ones who did spent more, and Cineplex got better at monetizing the visit.
Valuation is where the case gets interesting. Cineplex stock’s market cap is about $668 million, while the enterprise value is about $2.3 billion, which reminds investors that debt still matters here. Total debt stood near $1.8 billion at year-end 2025. Right now, it trades at 0.53 times sales and about 22 times forward earnings. So no, this is not a deep-value no-brainer. The risk is clear: if box office momentum stalls or a weak film slate hits results, the balance sheet can still feel heavy. But if premium formats, advertising, and entertainment venues keep improving, Cineplex stock has room to grow into a higher valuation over the next few years.
Bottom line
Cineplex stock is not perfect, and that is exactly why the opportunity still exists. The recovery is not complete, the risks are still visible, and the stock is still down enough to feel overlooked. But the business is stabilizing, spending per guest is rising, and management is making practical moves to strengthen the company. For investors willing to look a few years ahead, this looks like one Canadian stock that is down, but not out.
