Marcus (MCS) AI Stock Analysis

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Marcus

(NYSE:MCS)

Rating:61Neutral

Price Target:

$18.50

▲(5.59%Upside)

Marcus Corporation's stock scores moderately due to mixed financial performance with strong revenue growth but ongoing profitability issues. The technical analysis shows potential weakness, while valuation poses challenges with a negative P/E ratio. The earnings call and corporate events provide some optimism with strategic initiatives and shareholder returns, but the overall balance of factors suggests cautious optimism with underlying risks.

Positive Factors

Earnings

The second quarter box office has gotten off to an exceptional start with April box office more than doubling YOY and in line with the average for April box office from 2015-2019.

Film Slate

Early Q2 momentum is building with A Minecraft Movie, Sinners, and Thunderbolts exceeding expectations, validating the view that a strong 2Q film slate could drive upside.

Financial Strategy

A strong balance sheet with low debt remains a valuable attribute for the company.

Negative Factors

Cost Management

Elevated film costs and labor drag are expected to pressure concession margin as staffing expenses were misaligned with actual delivered attendance.

Financial Performance

Marcus's theatrical segment likely faced a tough 1Q, with flat to down admissions and pressured margins driven by elevated film rental costs from holiday holdovers and labor inefficiencies tied to the surprise collapse of Snow White.

Gross Margin

The extra revenue contribution from the extended quarter likely came at a cost, with much of the performance driven by holdover titles from the 2024 holiday season, which carry elevated film rental terms and are expected to meaningfully pressure film gross margin.

Marcus (MCS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$536.10M

Dividend Yield1.6%

Average Volume (3M)181.31K

Price to Earnings (P/E)―

Beta (1Y)0.44

Revenue Growth4.18%

EPS Growth-207.46%

CountryUS

Employees2,907

SectorCommunication Services

Sector Strength90

IndustryEntertainment

Share Statistics

EPS (TTM)-0.54

Shares Outstanding24,312,990

10 Day Avg. Volume207,315

30 Day Avg. Volume181,308

Financial Highlights & Ratios

PEG Ratio0.61

Price to Book (P/B)1.25

Price to Sales (P/S)0.00

P/FCF Ratio-174.35

Enterprise Value/Market Cap1.70

Enterprise Value/Revenue0.32

Enterprise Value/Gross Profit2.41

Enterprise Value/Ebitda2.96

Forecast

1Y Price Target

$25.25

Price Target Upside44.12% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Marcus Business Overview & Revenue Model

Company DescriptionMarcus (MCS) is a financial services company that operates primarily in the consumer banking sector. It offers a range of products and services, including savings accounts, personal loans, and investment management solutions. Marcus aims to provide transparent, user-friendly financial solutions to help individuals manage their personal finances effectively.

How the Company Makes MoneyMarcus makes money through the interest rate differential on its lending and savings products. It earns revenue from interest charged on personal loans and credit products, while paying out lower interest rates on customer deposits held in savings accounts. Additionally, Marcus may generate income from investment advisory services and management fees associated with its investment products. Strategic partnerships with other financial institutions and technology companies also contribute to its revenue streams by expanding its customer base and enhancing its product offerings.

Marcus Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 7.35%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook for Marcus Corporation. While there were positive aspects such as revenue growth in both divisions, a strong April for theaters, and a robust balance sheet, challenges included an operating loss in the theater division, occupancy impacts from hotel renovations, and increased costs affecting profitability. The positive outlook for the summer movie season and strategic capital returns to shareholders provide some optimism.

Q1-2025 Updates

Positive Updates

Revenue Growth in Both Divisions

Consolidated revenues increased by $10.2 million or 7.4% compared to the prior year, reaching $148.8 million. This growth was observed in both the theaters and hotels divisions.

Positive April and Summer Outlook for Theaters

April saw a turnaround with several films exceeding expectations, contributing to a strong start for the summer movie season. The industry is up nearly 16% year-to-date through April, with upcoming major releases contributing to a positive outlook.

Hotel Division RevPAR and Revenue Growth

Hotels and resorts revenues increased by 7.2% to $61.3 million. RevPAR for comparable owned hotels grew by 1.1%, with an 8% increase in the average daily rate.

Strong Balance Sheet and Liquidity

The company ended the quarter with $12 million in cash and over $192 million in total liquidity, maintaining a debt-to-capitalization ratio of 31% and net leverage of 2x.

Successful Capital Return to Shareholders

The company repurchased approximately 424,000 shares for $7.1 million, and over the last four quarters, returned over $25 million to shareholders through dividends and share repurchases.

Negative Updates

Theater Division Operating Loss and Attendance Decrease

Operating loss for the quarter was $20.4 million, negatively impacted by increased costs. Theater attendance decreased by 8% on a straight calendar quarter basis, trailing the industry by 1.8 percentage points.

Renovation Impact on Hotel Occupancy

The Hilton Milwaukee renovation led to a 3.4 percentage point decrease in overall occupancy rate and negatively impacted RevPAR growth by nearly 4 percentage points.

Increased Costs and Decreased Adjusted EBITDA

Consolidated adjusted EBITDA was a loss of $300,000, a decrease of $2.6 million. Increased depreciation, stock-based compensation, and labor costs contributed to this decline.

Company Guidance

In the call, Marcus Corporation provided guidance for the first quarter of fiscal 2025, highlighting several key metrics. The company reported consolidated revenues of $148.8 million, an increase of $10.2 million or 7.4% from the previous year, with the theater division contributing $87.4 million, up 7.5%, and the hotels and resorts division contributing $61.3 million, up 7.2%. The favorable impact of a fiscal calendar change accounted for $9.2 million in revenue growth. However, the company faced an operating loss of $20.4 million, an improvement of $3.7 million from the prior year, partly due to increased depreciation expenses and non-cash stock-based compensation. Despite challenges, including higher film and labor costs, the theater division's adjusted EBITDA was $3.7 million, while the hotels segment achieved $1 million in adjusted EBITDA. Marcus Corporation ended the quarter with $12 million in cash and $192 million in total liquidity, maintaining a debt-to-capitalization ratio of 31% and net leverage of 2x. The company also repurchased 424,000 shares for $7.1 million, reflecting confidence in its business and commitment to returning capital to shareholders.

Marcus Financial Statement Overview

Summary

Marcus shows growth potential in revenue and operational efficiency, but profitability remains a challenge with consistent net losses. The balance sheet displays moderate leverage with a stable equity position, while cash flow generation is strong but under pressure due to high capital expenditures. Overall, the company exhibits resilience but faces profitability and cash flow challenges that need addressing for long-term sustainability.

Income Statement

Positive

The company has demonstrated consistent revenue growth over the years, with a recent TTM increase. Gross profit margins have improved, reflecting operational efficiency. However, profitability remains a concern with negative net income and EBIT in the latest TTM and previous annual reports.

Balance Sheet

Positive

The debt-to-equity ratio reflects moderate leverage, and the company maintains a healthy equity ratio. However, the decline in stockholders' equity over the recent periods is a concern that could impact future financial stability.

Cash Flow

Neutral

Operating cash flow remains positive, indicating strong cash generation capability. However, free cash flow has turned negative in the TTM, indicating potential challenges in covering capital expenditures. The cash flow to net income ratios indicate a need for improvement in converting profits into cash.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
745.78M	735.56M	729.58M	677.39M	458.24M	237.69M
	Gross Profit
378.75M	327.84M	323.96M	257.39M	183.74M	51.14M
	EBIT
12.85M	16.17M	33.93M	8.31M	-38.29M	-153.75M
	EBITDA
75.54M	68.72M	101.67M	74.53M	31.84M	-104.47M
	Net Income Common Stockholders
-12.74M	-7.79M	14.79M	-9.10M	-43.29M	-124.87M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
126.47M	40.84M	60.95M	21.70M	17.66M	6.75M
	Total Assets
1.44B	1.04B	1.07B	1.06B	1.19B	1.25B
	Total Debt
631.32M	352.63M	379.06M	407.77M	515.10M	563.47M
	Net Debt
504.85M	311.79M	323.47M	386.07M	497.44M	556.72M
	Total Liabilities
843.00M	579.66M	593.93M	607.68M	734.75M	755.46M
	Stockholders Equity
598.39M	464.87M	471.17M	456.92M	453.61M	498.72M
Cash Flow		Free Cash Flow
-3.07M	24.73M	63.85M	56.37M	29.17M	-89.92M
	Operating Cash Flow
83.71M	103.94M	102.63M	93.21M	46.25M	-68.55M
	Investing Cash Flow
-83.92M	-81.90M	-36.75M	-346.00K	10.88M	-12.07M
	Financing Cash Flow
-4.62M	-37.30M	-30.55M	-92.41M	-47.17M	69.10M

Marcus Technical Analysis

Technical Analysis Sentiment

Positive

Last Price17.52

Price Trends

50DMA

16.77

Positive

100DMA

17.89

Negative

200DMA

18.11

Negative

Market Momentum

MACD

0.19

Positive

RSI

53.10

Neutral

STOCH

31.60

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCS, the sentiment is Positive. The current price of 17.52 is above the 20-day moving average (MA) of 17.49, above the 50-day MA of 16.77, and below the 200-day MA of 18.11, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 53.10 is Neutral, neither overbought nor oversold. The STOCH value of 31.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCS.

Marcus Risk Analysis

Marcus disclosed 29 risk factors in its most recent earnings report. Marcus reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Marcus Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CNK	74 Outperform	$3.62B	20.80	71.46%	1.01%	-0.80%	13.07%
AMCX	63 Neutral	$316.29M	13.94	-25.83%	―	-8.14%	-258.98%
Sector *	61 Neutral	$14.79B	5.90	-3.99%	6.20%	2.67%	-30.30%
MCS	61 Neutral	$536.10M	―	-2.83%	1.60%	4.18%	-207.46%
SPHR	56 Neutral	$1.41B	―	-15.64%	―	-5.04%	-155.66%
AMC	49 Neutral	$1.45B	―	20.03%	―	-5.43%	26.07%
RDI	47 Neutral	$47.31M	―	-540.12%	―	-7.36%	18.52%

* Communication Services Sector Average

Performance Comparison

MCS

Marcus

17.57

7.37

72.25%

AMCX

AMC Networks

6.98

-8.65

-55.34%

CNK

Cinemark Holdings

32.13

14.40

81.22%

AMC

AMC Entertainment

3.29

-1.91

-36.73%

RDI

Reading International

1.41

-0.09

-6.00%

SPHR

Sphere Entertainment

39.82

4.94

14.16%

Marcus Corporate Events

Shareholder MeetingsBusiness Operations and Strategy

Marcus Approves 2025 Omnibus Incentive Plan

Positive

May 12, 2025

On May 7, 2025, The Marcus Corporation’s 2025 Omnibus Incentive Plan became effective following shareholder approval at the annual meeting. This plan allows for equity and cash incentive awards, including the issuance of up to 2,000,000 shares of common stock. The plan’s approval impacts the company’s operations by enabling it to offer substantial incentives to employees, potentially enhancing employee retention and aligning their interests with those of shareholders.

The most recent analyst rating on (MCS) stock is a Buy with a $27.00 price target. To see the full list of analyst forecasts on Marcus stock, see the MCS Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.