Marcus Corp (NYSE: MCS)

Sector: Communication Services Industry: Entertainment CIK: 0000062234
Market Cap 451.08 Mn
P/B 0.99
P/E 58.42
P/S 0.60
ROIC (Qtr) 1.10
Div Yield % 2.44
Rev 1y % (Qtr) -9.68
Total Debt (Qtr) 342.57 Mn
Debt/Equity (Qtr) 0.75

About

Marcus Corp, known by its ticker symbol MCS, is a prominent player in the entertainment and hospitality industry. The company runs its operations in two primary segments: movie theatres and hotels and resorts. As of December 28, 2023, Marcus Corp managed 79 movie theatres with 993 screens across 17 states, making it the fourth largest theatre circuit in the United States. Marcus Corp's movie theatre business is built on providing a premium movie-going experience, with a mix of megaplex theatres, multiplex theatres, and single-screen theatres. The...

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Price action

Investment thesis

Bull case

  • Strong tangible asset base of 929.30M provides 2.71x coverage of total debt 342.57M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 87.97M provides strong 12.11x coverage of stock compensation 7.26M, indicating sustainable incentive practices.
  • Tangible assets of 929.30M provide robust 10.21x coverage of other current liabilities 91.03M, indicating strong asset backing.
  • Operating cash flow of 87.97M provides solid 0.61x coverage of current liabilities 144.21M, showing strong operational health.
  • Operating cash flow of 87.97M fully covers other non-current liabilities 82.21M by 1.07x, showing strong long-term stability.

Bear case

  • Operating cash flow of 87.97M barely covers its investment activities of (70.11M), with a coverage ratio of -1.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 87.97M provides thin coverage of dividend payments of (8.93M) with a -9.86 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 87.97M provides minimal -31.08x coverage of tax expenses of (2.83M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 5.61M provides weak coverage of capital expenditures of 82.35M, with a 0.07 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 16.27M show weak coverage of depreciation charges of 70.25M, with a 0.23 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 398.09 Bn 38.16 9.18 14.46 Bn
2 DIS Walt Disney Co 204.13 Bn 16.46 2.16 42.03 Bn
3 WBD Warner Bros. Discovery, Inc. 70.69 Bn 145.75 1.87 33.52 Bn
4 FWONA Liberty Media Corp 53.12 Bn -399.43 13.15 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 33.40 Bn 103.67 1.36 9.39 Bn
6 FOXA Fox Corp 33.26 Bn 16.34 2.02 6.60 Bn
7 PSKY Paramount Skydance Corp 18.94 Bn -1,353.00 0.66 14.73 Bn
8 TKO TKO Group Holdings, Inc. 17.56 Bn 76.76 4.05 4.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.80 1.53
EV to Cash from Ops. EV/CFO 9.09 25.10
EV to Debt EV to Debt 2.33 5.03
EV to EBIT EV/EBIT 49.13 165.24
EV to EBITDA EV/EBITDA 9.59 -156.71
EV to Free Cash Flow [EV/FCF] EV/FCF 142.43 72.07
EV to Market Cap EV to Market Cap 1.77 2.12
EV to Revenue EV/Rev 1.06 6.42
Price to Book Value [P/B] P/B 0.99 2.40
Price to Earnings [P/E] P/E 58.42 -114.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.87 1.03
Dividend Payout Ratio % Div Payout % (Qtr) 111.50 -17.28
Dividend per Basic Share Div per Share (Qtr) 0.29 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 162.01 7.73
Interest Coverage Int. cover (Qtr) 1.43 -38.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -32.00 -33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -68.28 248.04
Dividend Growth (1y) % Div 1y % (Qtr) 3.57 0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 227.16 -100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.80 -28.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 214.31 -85.91
EBT Growth (1y) % EBT 1y % (Qtr) 172.63 24.10
EPS Growth (1y) % EPS 1y % (Qtr) 181.25 18.31
FCF Growth (1y) % FCF 1y % (Qtr) -75.56 118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.27 30.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.75 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.04
Cash Ratio Cash Ratio (Qtr) 0.07 0.45
Current Ratio Curr Ratio (Qtr) 0.35 1.09
Debt to Equity Ratio Debt/Equity (Qtr) 0.75 1.01
Interest Cover Ratio Int Coverage (Qtr) 1.43 -38.17
Times Interest Earned Times Interest Earned (Qtr) 1.43 -38.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.50 -65.26
EBIT Margin % EBIT Margin % (Qtr) 2.16 -79.53
EBT Margin % EBT Margin % (Qtr) 0.65 -82.47
Gross Margin % Gross Margin % (Qtr) 38.50 35.56
Net Profit Margin % Net Margin % (Qtr) 1.00 -83.18