Cineplex Inc. (TSX: CGX) has been through bad times. But is this entertainment company finally coming out of the doldrums and into profitable growth once again? Judging by Cineplex stock’s recent performance as well as its record-breaking box office results, it seems like maybe it is.
Let’s take a look.
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Cineplex: Latest results
As Cineplex’s management stated, second quarter 2026 was a “defining moment”. Revenues and attendance were higher, operating leverage kicked in, and Cineplex benefitted from this momentum. Box office revenue of $176.2 million was the highest second-quarter box office since 2019. In August, Cineplex’s box office revenues of $98 million were the highest monthly box office performance of all time.
Finally, Q2 earnings per share (EPS) came in at $0.12 versus a loss of $0.03 in the prior year. This performance was driven by a 9.8% increase in attendance and the corresponding operating leverage.
Earnings estimates on the rise
Naturally, after a quarter like that and with the box office strength that’s being posted, earnings estimates for Cineplex stock are on the rise. The consensus EPS estimate for 2027 has increased to $0.63, which represents a more than 50% increase from 2026’s estimate. Also, this compares to the $0.58 loss that Cineplex stock posted in 2025.
Clearly, Cineplex has come a long way. And Cineplex’s (CGX) stock price and valuation do not include the new realities that are coming to fruition. In fact, despite its recent rally, the stock is trading at only 20 times its 2027 EPS estimate, which is likely too low.
The upside that exists comes from continued operating leverage as well as debt reduction and the eventual re-institution of the dividend.
Cineplex stock remains in the doghouse
The point that I would like to drive home is the fact that Cineplex stock has gone from being an investor darling with a consistent cash flow profile and reliable dividend to one that is shunned by investors. This is understandable given the trouble that Cineplex had thrust upon it due to the pandemic.
But, as far as the company is concerned, management has been doing the right things with what it could control. Premium movie-going experiences, new location-based entertainment complexes, and more diversification have all served to strengthen Cineplex stock. Also, partnerships and cooperation with streaming companies have served to better secure Cineplex’s spot in the movie business. Simply put, the company is in a better position now than it was before the pandemic.
Cineplex stock was once recognized for its stable cash flows and predictable business that pretty much has a monopoly in the industry. Today, these facts are still true. Once Cineplex moves out of the storm, the strengths of its business will likely be evident again.
The bottom line
So, in summary, I do believe that now is a good time to buy Cineplex stock. Cineplex’s (CGX) stock price was trading beyond $50 in its heyday, and it seems reasonable to expect it to recover and head back closer to that level over time.
Cineplex is ramping its revenue, earnings, and cash flow. As this continues, the company will be able to further reduce its debt, continue to buy back shares, and ultimately, reinstate its dividend. All of this will serve to further increase CGX stock’s earnings per share numbers as well as the multiple that investors are willing to pay for it.
