IMAX Expands HOYTS Partnership with 10 New Laser Locations

What happened

IMAX announced an agreement with HOYTS Cinemas for ten new IMAX with Laser locations across Australia and New Zealand, nearly doubling its footprint in the region. While the deal reinforces IMAX's international expansion and backlog conversion momentum, it is a modest addition to a global network of over 1,800 systems and does not alter the core investment thesis. The company's record 2025 box office of $1.28B and guidance for ~$1.4B in 2026 have already been priced into the stock at ~48x trailing earnings, leaving limited upside. Risks remain from China exposure, slate-dependent earnings, and a TAM of only 3,619 multiplex locations with ~48% penetration. The HOYTS deal is incrementally positive but insufficient to offset the current risk-reward skew.

Implication

The HOYTS expansion supports IMAX's growth narrative and backlog execution, but with the stock trading at ~48x P/E and 18x EV/EBITDA, expectations are already elevated. The deal adds only ~0.5% to the installed base and does not address overvaluation, China risk, or the cyclical nature of box office. Investors should wait for a larger margin of safety below $30 before considering a position.

Thesis delta

No change to the thesis; the HOYTS deal is a positive but marginal addition to backlog conversion, and does not mitigate the downside risks from high valuation, China exposure, or slate dependency. The stock remains a potential sell at $35.