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Cinemark Holdings, Inc. (NYSE:CNK), a leader in the motion picture exhibition industry with a market capitalization of $2.85 billion, announced on March 6, 2025, that its Board of Directors has approved a new stock repurchase program. The program authorizes the company to buy back up to $200 million of its outstanding common stock. Currently trading at $23.74, InvestingPro analysis suggests the stock is slightly undervalued, despite a challenging year-to-date performance of -23%.
The repurchase initiative is set to start on March 11, 2025, and will continue until the full amount has been repurchased or until the Board decides to suspend or end the program. The company may conduct these repurchases on the open market, through privately negotiated transactions, or other methods as allowed by federal securities laws. With a healthy EBITDA of $559.9 million and strong free cash flow yield of 11%, Cinemark appears well-positioned to execute this buyback program.
A portion of the stock repurchase may be conducted under a Rule 10b5-1 trading plan, which permits stock repurchases at times when the company might otherwise be precluded from doing so due to insider trading laws or because of self-imposed trading blackout periods.
The timing and volume of the buybacks will be subject to market conditions, stock price, and other factors, and will be at the discretion of the company’s management. The repurchases will be funded using Cinemark’s available cash and will comply with all applicable securities laws.
The implementation of this buyback program is part of Cinemark’s strategy to manage potential dilution from the settlement of its convertible notes due in August 2025 and the associated call spread. The company believes that the repurchase program reflects its confidence in its long-term business prospects and is in the best interest of its shareholders. InvestingPro data supports this confidence, showing a strong overall financial health score and profitable operations with a gross profit margin of 49.5%. For deeper insights into Cinemark’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
This announcement includes forward-looking statements, which are based on current management expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that might affect the program’s timing and amount include economic conditions and other risks detailed in the company’s SEC filings.
The information in this news article is based on a press release statement from Cinemark Holdings, Inc. The company has made no commitment to repurchase any specific number of shares and may suspend or discontinue the program at any time at its discretion. Trading at an attractive P/E ratio of 9.18 and with analysts predicting continued profitability, Cinemark presents an interesting case for investors. Get access to over 30 additional key metrics and exclusive ProTips for Cinemark with an InvestingPro subscription.
In other recent news, Cinemark Holdings reported their fourth-quarter 2024 earnings, revealing a revenue of $814.3 million, surpassing analyst expectations of $780.75 million. However, the company’s earnings per share (EPS) came in at $0.33, missing the forecasted $0.36, which contributed to a notable decline in investor sentiment. Despite the EPS shortfall, Cinemark’s annual revenue for 2024 was $3,049.5 million, showing a slight decrease from the previous year, but the net income improved significantly to $309.7 million from $188.2 million in 2023. The company reinstated its annual cash dividend at $0.32 per share, indicating confidence in its post-pandemic recovery.
Benchmark analysts adjusted their outlook on Cinemark, lowering the price target to $35 from $40 while maintaining a Buy rating. They noted the company’s robust fourth-quarter sales and highlighted a promising film lineup for 2025, alongside ongoing expansions of premium-format screens. Additionally, Cinemark announced the appointment of Wanda Gierhart as Chief Marketing and Content Officer, effective February 28, 2025, reflecting a strategic move to strengthen its executive management team.
Benchmark’s analysis also pointed out that Cinemark’s concession sales have increased by 48% since 2019, with a projected concession sales per patron of $7.89 for 2024. The firm emphasized that these sales now represent a larger proportion of total sales, which is beneficial due to their higher margin compared to admission sales. These developments illustrate Cinemark’s strategic focus on enhancing profitability through higher-margin sales and operational efficiencies.
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