Why Entertainment Investors Should Reconsider: Disney Outpaces IMAX in Long-Term Value

The Temptation of IMAX’s Momentum

IMAX has undeniably captured market attention throughout 2025. The large-format cinema technology provider achieved breakthrough performance, setting company records across multiple metrics. Most recently, the blockbuster Avatar: Fire and Ash delivered the company’s fifth-best opening in ticket sales history, rolling out across an unprecedented 1,703 screens—the widest IMAX distribution to date.

The company’s financial performance reinforces this positive narrative. Third-quarter results showcased revenue climbing 17% to approximately $107 million, establishing a new quarterly benchmark. Non-GAAP net income surged even more dramatically, jumping 39% to reach $26 million—outcomes that surpassed analyst consensus expectations.

Disney’s Diversified Strength

Yet beneath the surface, a more compelling investment case emerges when examining Walt Disney’s operational breadth and financial trajectory. While IMAX thrives in a single vertical, Disney operates across multiple entertainment channels, reducing vulnerability to sector-specific disruptions.

Disney’s fiscal 2025 results, released in November, demonstrate this advantage. The entertainment conglomerate generated over $94 billion in revenue, representing 3% year-over-year growth. More significantly, all three operational divisions—entertainment, sports, and experiences—posted revenue gains. Operating income expanded even more robustly across these segments, culminating in a GAAP net profit surge of approximately 58% to reach $12 billion.

The company’s streaming ecosystem, anchored by Disney+, finally achieved profitability in 2024 after years of investment, marking a crucial inflection point. Looking ahead, Disney projects that its largest revenue segment (entertainment) will expand operating income at double-digit rates during fiscal 2026, with sports and experiences contributing single-digit percentage growth.

The Valuation Reality Check

When comparing investment merit through financial metrics, Disney demonstrates clear advantages:

• Price-to-Book Ratio: Disney trades at 1.84 versus IMAX’s 5.8, suggesting better value relative to asset base
• Price-to-Sales Ratio: Disney’s ratio sits below 2.2, compared to IMAX’s 5.5, indicating superior revenue efficiency pricing
• Forward P/E Multiple: Disney’s forward valuation of 17 contrasts favorably with IMAX’s 22

These metrics collectively suggest that Disney offers more attractive entry points despite its significantly larger scale.

Building a Durable Competitive Position

IMAX remains a competently managed enterprise with genuine growth prospects. However, the company’s business model centers primarily on theatrical exhibition trends. Should consumer cinema habits shift, IMAX faces direct headwinds.

Disney, conversely, represents a mature entertainment powerhouse with decades of intellectual property monetization across films, television, theme park attractions, consumer merchandise, and licensing arrangements. This diversification creates multiple revenue streams and reduces dependence on any single entertainment format.

The Verdict for Informed Investors

For those evaluating entertainment sector exposure, Disney emerges as the superior long-term holding. Its established market position, revenue diversification, improving profitability trajectory, and attractive valuation create a more compelling risk-reward profile than IMAX’s narrower specialization, regardless of the latter’s recent momentum.

The choice between a specialized player and a diversified giant ultimately favors the latter for portfolio construction purposes.