Zacks Industry Outlook Highlights TKO Group, Cinemark and IMAX

For Immediate Release

Chicago, IL – October 31, 2025 – Today, Zacks Equity Research discusses TKO Group Holdings, Inc. TKO, Cinemark CNK and IMAX IMAX.

Industry: Film & TV Production

Link: https://www.zacks.com/commentary/2781612/3-film-television-production-stocks-to-watch-in-a-challenging-market

The Zacks Film and Television Production and Distribution industry is witnessing a surge in demand for digital entertainment due to operational constraints faced by movie theaters, theme parks and cruise lines. This increased consumption of online media, music and news, driven by the work-and-learn-from-home trend, has been a boon for industry players like TKO Group Holdings, Inc., Cinemark and IMAX. However, as more players enter the field, content costs are skyrocketing, putting pressure on profitability. This trend is forcing companies to spend heavily on original programming and exclusive rights to attract and retain viewers, which can strain financial resources and impact stock performance.

Industry Description

The Zacks Film and Television Production and Distribution industry encompasses companies engaged in the creation, distribution and exhibition of film and television content. The core activities revolve around producing entertainment for theaters, television networks, video-on-demand platforms, streaming services and other outlets that showcase such works.

A notable company like IMAX specializes in advanced motion picture technologies and immersive presentation experiences. Industry participants are involved in the production and dissemination of movies destined for theatrical releases and direct-to-video markets, as well as television programming. The financial performance of these entities hinges greatly on the global box office success of their films, coupled with the number of new releases and the viewership ratings garnered by their television shows.

3 Film and Television Production Industry Trends in Focus

Over-the-Top Services Gain Prominence: Content creators are increasingly distributing through over-the-top streaming services to capitalize on the popularity of their franchises. Their aim is to provide exclusive content and a differentiated viewing experience. However, streaming companies themselves are producing more original, award-winning programming to reduce licensing costs and reliance on third-party providers, which could undermine traditional content distribution strategies.

Binge-Watching Drives Consumption: Phenomena like binge-watching, wider Internet adoption, and advancements in mobile, video and wireless technologies have led consumers to frequently view content on smaller screens. To adapt to these new viewing patterns, industry players are pivoting to digital content distribution. The rise of digital capabilities provides easier access to consumer data, allowing production companies to leverage AI tools for a better understanding of audience preferences and to create resonant content. However, intense competition from streamers is forcing increased spending on content and marketing, hurting profitability.

Technological Advancement Aids Prospects: Exhibitors are adopting highly efficient, cost-effective laser projection systems to enhance image quality and the overall movie experience. Technologies like motion seating, immersive audio, interactive movies, AR and VR are expected to further elevate the viewing experience. Conversely, the growth of alternative distribution channels like home video, pay-per-view, streaming, VOD, Internet and broadcast TV is challenging traditional exhibitors.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Film and Television Production and Distribution industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #209, which places it in the bottom 14% of more than 246 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Oct. 31, 2024, the industry’s earnings estimate for 2025 has moved down 29.5%.

Despite the gloomy industry outlook, a few stocks are worth watching based on a strong earnings outlook. Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Outperforms the Sector, S&P 500

The Zacks Film and Television Production and Distribution industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite over the past year.

The industry has returned 25.1% in the above-mentioned period compared with the broader sector’s growth of 4.3%. The S&P 500 has risen 20.7% during the same time frame.

Industry's Current Valuation

On the basis of the trailing 12-month price-to-sales (P/S), a commonly used multiple for valuing Film and Television Production and Distribution stocks, the industry is currently trading at 2.93X compared with the S&P 500’s 6.14X and the sector’s 2.38X.

Over the past five years, the industry has traded as high as 3.2X and as low as 1.35X, recording a median of 2.2X.

3 Film & Television Stocks to Watch Right Now

IMAX presents a compelling near-term investment opportunity following its exceptional Q3 2025 results. This Zacks Rank #2 (Buy) company reported its highest third-quarter revenue ever at $106.7 million, with global box office jumping nearly 50% year over year to $368 million. Profitability surged impressively, with net income increasing 67% to $22.6 million and adjusted EBITDA margin expanding to 48.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company's diversified content strategy is driving sustainable growth beyond single blockbuster dependence, with local language films contributing significantly alongside Hollywood releases. System signings of 142 year-to-date have already eclipsed full-year 2024's total of 130, demonstrating robust expansion momentum. Management reaffirmed its full-year 2025 guidance of $1.2 billion in global box office, signaling confidence in continued strong performance. With improving margins, record cash flow generation, and a promising upcoming slate, IMAX appears well-positioned for sustained growth heading into 2026.

The Zacks Consensus Estimate for IMAX’s 2025 earnings has moved north by 4% to $1.30 per share over the past 30 days. IMAX shares have gained 28.6% year to date.

TKO Group Holdings completed its $3.25 billion acquisition of IMG, On Location, and Professional Bull Riders in February 2025, significantly diversifying its revenue streams beyond UFC and WWE. Management demonstrated confidence by raising full-year 2025 guidance to $4.6-4.7 billion in revenue and $1.5-1.6 billion in adjusted EBITDA, reflecting strong operational execution across all properties. The company initiated a substantial $1 billion share repurchase program in September 2025, including an $800 million accelerated share repurchase agreement, signaling management's conviction in intrinsic value.

This Zacks Rank #3 (Hold) company doubled its quarterly dividend to approximately $150 million, enhancing shareholder returns following successful media rights renewals. TKO's combination of strategic M&A integration, robust capital allocation, and premium live sports content positions it attractively for investors seeking exposure to the growing sports entertainment sector.

The Zacks Consensus Estimate for TKO’s 2025 earnings has moved north by 0.7% to $2.84 per share over the past 30 days. TKO shares have surged 31.3% year to date.

Cinemark warrants close attention as the theatrical exhibition leader approaches its Q3 2025 earnings report scheduled for Nov. 5. Recent box office momentum includes The Conjuring: Last Rites achieving Cinemark's second-biggest domestic horror opening weekend, demonstrating strong operational execution. Despite Q3 softness from September's weaker film slate, optimism about Q4's strengthening release calendar positions the sector for a sharp rebound.

This Zacks Rank #3 company reinstated its dividend at 32 cents annually after successfully strengthening its balance sheet and expanding strategic partnerships with Rokt's AI-powered ecommerce technology. With October releases, including Black Phone 2, and strong film pipelines for the near-term, Cinemark's fundamentals suggest promising near-term catalysts for investors tracking the theatrical recovery.

The Zacks Consensus Estimate for CNK’s 2025 earnings has moved south by 0.7% to $1.40 per share over the past 30 days. CNK shares have declined 11.9% year to date.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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