Cinemark Holdings (CNK) reports third-quarter loss, topping revenue estimates

Cinemark Holdings (CNK) reported quarterly loss of $0.20 per share versus the Zacks Consensus Estimate of a loss of $0.21. That compares to a loss of $0.65 per share a year earlier. These numbers were adjusted for one-time items.

This quarterly report presented an earnings surprise of 4.76%. A quarter ago, it was expected that this cinema owner would earn $0.13 per share when it actually produced earnings of $0.17, delivering a surprise of 30.77%.

The company has topped consensus earnings per share estimates three times over the last four quarters.

Cinemark, which belongs to the Zacks Leisure and Leisure Services industry, posted revenues of $650.4 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 5.55%. For comparison, revenues from the previous year amounted to USD 434.82 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock’s current price movement based on recently-released numbers and future earnings expectations will primarily depend on management’s commentary following the earnings conference call.

Cinemark shares have lost about 34.2% since the beginning of the year compared with the S&P 500 Index’s decline of -22%.

What’s next for Cinemark?

While Cinemark has underperformed the market this year, the question that comes to investors’ minds is: What’s next for the stock?

There are no simple answers to this key question, but one reliable indicator that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of its earnings release, the estimate revision trend for Cinemark is mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.01 on revenues of $673.19 million for the coming quarter and -$1.49 on revenues of $2.52 billion for the current fiscal year.

Investors should be aware that the outlook for an industry can also have a significant impact on stock prices. In terms of the Zacks Industry Rank, Leisure & Recreation Services currently ranks in the top 35% of the 250+ Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same industry, Xponential Fitness (XPOF), has not yet released results for the quarter ending September 2022. The results are expected to be released on November 10.

This franchisor of high-end fitness brands is expected to report quarterly earnings of $0.12 per share in its upcoming report, representing a year-over-year change of +138.7%. The consensus earnings per share estimate for the quarter remained unchanged over the last 30 days.

Xponential Fitness revenue is expected to be $55.15 million, up 35% from the year-ago quarter.

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