Cineplex Inc. Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Investors in Cineplex Inc. (TSE:CGX) had a good week, as its shares rose 3.4% to close at CA$10.30 following the release of its third-quarter results. Revenues of CA$396m beat expectations by 2.8%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of CA$0.39 compared to previous analyst expectations of a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Cineplex

Taking into account the latest results, the current consensus from Cineplex's six analysts is for revenues of CA$1.51b in 2025. This would reflect a huge 22% increase on its revenue over the past 12 months. Before this earnings report, the analysts had been forecasting revenues of CA$1.50b and earnings per share (EPS) of CA$0.99 in 2025. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate. This suggests that revenues are what the market is focusing on after the latest results.

We'd also point out that thatthe analysts have made no major changes to their price target of CA$12.92. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Cineplex, with the most bullish analyst valuing it at CA$16.00 and the most bearish at CA$11.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cineplex's past performance and to peers in the same industry. It's clear from the latest estimates that Cineplex's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Cineplex is expected to grow much faster than its industry.

The Bottom Line

The clear take away from these updates is that the analysts made no change to their revenue estimates for next year, with the business apparently performing in line with their models. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CA$12.92, with the latest estimates not enough to have an impact on their price targets.

We have estimates for Cineplex from its six analysts out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Cineplex that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.