Cineplex sees Q1 revenue fly 452.3%: Are COVID woes over for CGX stock?

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 Cineplex sees Q1 revenue fly 452.3%: Are COVID woes over for CGX stock?
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Highlights

  • Around the time of opening bell, Cineplex stock was up by eight per cent on Friday, May 13.
  • The Canadian movie theatre chain has announced that its box office revenue approached pre-pandemic levels in Q1 FY2022.
  • The surge came as the company welcomed 6.7 million guests to its theatres in this quarter.

Cineplex (TSX: CGX) stock is soaring, and there is a reason for that! The Canadian movie theatre chain has just announced that its box office revenue approached pre-pandemic levels in the first quarter of fiscal 2022.

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The surge came as the company welcomed 6.7 million guests to its theatres and noted a box office revenues per patron (BPP) of C$ 12 during Q1 FY2022.

Around the time of opening bell, Cineplex stock was up by a significant eight per cent on Friday, May 13.

What else should investors learn about Cineplex's performance in the latest quarter? Let’s see.

Cineplex Inc (TSX: CGX) Q1 FY2022 results

Cineplex Inc recorded total revenues of C$ 228.7 million in Q1 FY2022, marking a notable growth of 452.3 per cent year-over-year (YoY). Its theatre attendance considerably improved to 6.7 million in the latest quarter compared to 0.4 million a year ago, primarily due to eased COVID restrictions.

With substantial quarterly revenue growth, the entertainment company minimized its net loss by 52.9 per cent YoY to C$ 42.2 million in the latest quarter. Its cash used in operating activities also reduced by 84.7 per cent YoY to C$ 5.4 million in Q1 FY2022.

Cineplex's concession revenues per patron (CPP) increased by 44.1 per cent to C$ 8.82.

Is it time to buy Cineplex (TSX: CGX) stock?

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Cineplex's stock performance

Having closed at C$ 11.42 on May 12, stocks of Cineplex were trading at C$ 12.38 at 10:50 AM EST on Friday. This is an important detail to note as the entertainment stock has grown by less than a per cent in a year.

Cineplex's Relative Strength Index (RSI), which suggests whether a stock is oversold or overbought, improved to 44.7 on May 13, according to the data collected from Refinitiv.

Bottomline

Cineplex has reported YoY revenue growth across its divisions, including film and entertainment content, media, and amusement and leisure, in Q1 2022. Considering its latest quarterly results, this small-cap company is could continue to emerge from the pandemic setbacks if market conditions prevail.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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