Critical Analysis: IMAX (NYSE:IMAX) vs. Playtika (NASDAQ:PLTK)

IMAX (NYSE:IMAX) and Playtika (NASDAQ:PLTK) are both communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Profitability

This table compares IMAX and Playtika’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IMAX	9.84%	15.47%	7.49%
Playtika	-9.89%	-65.82%	6.17%

Analyst Recommendations

This is a summary of recent ratings and price targets for IMAX and Playtika, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IMAX	0	3	11	1	2.87
Playtika	1	3	2	0	2.17

IMAX currently has a consensus target price of $58.08, suggesting a potential upside of 21.66%. Playtika has a consensus target price of $3.35, suggesting a potential upside of 37.30%. Given Playtika’s higher probable upside, analysts plainly believe Playtika is more favorable than IMAX.

Earnings and Valuation

This table compares IMAX and Playtika”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IMAX	$410.21 million	6.38	$34.88 million	$0.72	66.30
Playtika	$2.83 billion	0.33	-$206.40 million	($0.73)	-3.34

IMAX has higher earnings, but lower revenue than Playtika. Playtika is trading at a lower price-to-earnings ratio than IMAX, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

IMAX has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Playtika has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Institutional and Insider Ownership

93.5% of IMAX shares are owned by institutional investors. Comparatively, 11.9% of Playtika shares are owned by institutional investors. 20.6% of IMAX shares are owned by company insiders. Comparatively, 5.7% of Playtika shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

IMAX beats Playtika on 12 of the 15 factors compared between the two stocks.

About IMAX

IMAX Corporation, together with its subsidiaries, operates as a technology platform for entertainment and events worldwide. The company operates in two segments, Content Solutions and Technology Products and Services. The company offers IMAX DMR, a proprietary technology that digitally remasters films and other content into IMAX formats for distribution to the IMAX network; IMAX Enhanced that provides end-to-end technology across streaming content and entertainment devices at home; and SSIMWAVE, an AI-driven video quality solutions for media and entertainment companies. It also offers preventative and emergency maintenance services and quality monitoring to the IMAX network; film post-production services; and IMAX film and digital cameras to content creators. In addition, the company engages in the distribution of large-format documentary films to institutional theaters, as well as live performances and interactive events with artists and creators; after-market sales of IMAX System parts and 3D glasses; sale or lease of IMAX theater systems; provision of management services to three other theaters, as well as production advice and technical assistance to documentary and Hollywood filmmakers; and rental of company’s proprietary 2D and 3D large-format film cameras. The company markets its theater systems through a direct sales force and marketing staff to science and natural history museums, zoos, aquaria, and other educational and cultural centers, as well as theme parks, private home theaters, tourist destination sites, fairs, and expositions. It offers its services under the IMAX, IMAX 3D, Experience It In IMAX, The IMAX Experience, DMR, Filmed For IMAXTM, IMAX Live, IMAX Enhanced, and SSIMWAVE. The company operates a network of IMAX systems comprising commercial multiplexes, commercial destinations, and institutional locations in 90 countries and territories. IMAX Corporation was founded in 1967 and is headquartered in Mississauga, Canada.

About Playtika

Playtika Holding Corp., together with its subsidiaries, develops mobile games in the United States, Europe, Middle East, Africa, Asia pacific, and internationally. The company owns a portfolio of casual and social casino-themed games. It distributes its games to the end customer through various web and mobile platforms and direct-to-consumer platforms. Playtika Holding Corp. was founded in 2010 and is headquartered in Herzliya Pituach, Israel. Playtika Holding Corp. is a subsidiary of Playtika Holding UK II Limited.