Is IMAX Corp. overvalued or undervalued?

As of 18 February 2025, the valuation grade for IMAX Corp. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued based on several key financial ratios. The P/E ratio stands at 36, which is notably higher than the industry average, while the EV to EBITDA ratio is 13.45, further suggesting inflated valuation metrics. Additionally, the PEG ratio of 1.96 indicates that the stock may not be justified at its current price given its growth expectations.
When compared to peers, IMAX Corp. shows stark contrasts; for instance, Turtle Beach Corp. has a P/E of 14.04 and an EV to EBITDA of 6.97, highlighting a more attractive valuation. Similarly, Hamilton Beach Brands Holding Co. is valued fairly with a P/E of 6.38. Given these comparisons, IMAX Corp. appears to be significantly overvalued in relation to its peers. Despite a strong one-year return of 64.95% compared to the S&P 500's 10.26%, the current valuation metrics suggest that investors may be paying a premium that is not supported by the underlying financial performance.