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MoviePass Has Little To Fear From Cinemark's Movie Club, Analyst Says

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MoviePass Has Little To Fear From Cinemark's Movie Club, Analyst Says
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Helios and Matheson Analytics Inc (NASDAQ: HMNY) stock is down 23.9 percent this week after Cinemark Holdings, Inc. (NYSE: CNK) announced its own subscription movie ticket service to rival Helios’ MoviePass. While investors clearly see Cinemark’s Movie Club as a threat to MoviePass, Maxim analyst and Helios bull Brian Kinstlinger said Tuesday that Helios investors have nothing to worry about.

Where’s The Value?

Cinemark’s service doesn’t offer the type of value moviegoers can get from MoviePass, Kinstlinger said. (See his track record here.) 

Movie Club offers subscribers a single monthly ticket for $8.99 per month, whereas MoviePass subscribers get up to one ticket per day for $9.95.

Kinstlinger said he sees limited success for Cinemark’s new service at its current price.

“Given we argue Cinemark loyalists would benefit more from a MoviePass subscription in many cases, we expect only limited adoption of the Cinemark subscription offer."

Maxim estimates that MoviePass has already reached 1 million subscribers and is well on its way to the 2 million mark.

Profit Is Key

Others see Cinemark as the better play for investors. On Tuesday, Loop Capital analyst David Miller said MoviePass may offer a better value for customers, but Cinemark’s Movie Club is actually designed to generate profits for investors.

“Unlike MoviePass, which we believe is not sustainable in offering unlimited moviegoing at [a recent promotional rate of] $6.95/month, this mechanism is priced to actually produce operating income and not be a loss leader,” Miller wrote.

How To Play It

Investors so far haven’t rewarded Cinemark for the new service, but they have certainly punished Helios.

Maxim maintains a Buy rating and $25 price target for Helios and Matheson.

Loop Capital maintains a Buy rating and $47 price target for Cinemark.

Related Links:

Cinemark's Movie Club Steps Up The Competition With MoviePass

Why MoviePass Could Hit 1 Million Users This Year And What It Means For Helios & Matheson 

Latest Ratings for HMNY

DateFirmActionFromTo
Sep 2018Canaccord GenuityTerminatesBuyNot Rated
Jul 2018Maxim GroupAssumesHold
Apr 2018Canaccord GenuityMaintainsBuyBuy

View More Analyst Ratings for HMNY
View the Latest Analyst Ratings

Posted-In: Brian Kintslinger David Miller Loop Capital MaximAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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