Why Savvy Investors Should Overlook IMAX and Embrace Disney Instead

A Tale of Two Entertainment Players

IMAX (NYSE: IMAX) delivered an exceptional 2025, cementing its position as a standout performer in the theatrical exhibition space. The company shattered historical benchmarks throughout the year, with its total box office receipts hitting unprecedented levels. Most recently, the company achieved another milestone when Avatar: Fire and Ash became its fifth-strongest opening in terms of ticket volume, rolling out across a record-setting 1,703 IMAX screens globally.

Yet despite these accomplishments, Walt Disney (NYSE: DIS) presents a fundamentally more compelling investment thesis for those seeking exposure to entertainment equities.

IMAX’s Strong But Narrow Foundation

The momentum behind IMAX is undeniably real. Third-quarter financials underscore this vitality, with revenue climbing 17% year-over-year to reach nearly $107 million—a quarterly record. Non-GAAP net income demonstrated even more impressive arithmetic, surging 39% to exceed $26 million, both figures surpassing what Wall Street had anticipated.

The challenge, however, remains structural. IMAX operates within a narrower ecosystem compared to Disney. While the company has successfully diversified beyond traditional multiplex installations, its fortunes remain tethered to theatrical attendance patterns and film industry cycles—dynamics beyond its direct control.

Disney’s Fortress of Revenue Streams

Disney’s scale tells a different story. The entertainment colossus generated over $94 billion in fiscal 2025 revenue, representing 3% organic growth. More significantly, all three reporting divisions—entertainment, sports, and experiences—expanded their operating income at elevated rates. The company’s GAAP net profit surged nearly 58% to $12 billion, demonstrating operating leverage across its portfolio.

The company’s Disney+ streaming division finally achieved profitability in 2024 after years of heavy investment, removing a persistent investor concern. Looking ahead, Disney’s management projects that its largest segment (entertainment) will expand operating income by double-digit percentages throughout fiscal 2026, with other divisions contributing growth as well.

Where Valuation Meets Fundamentals

The financial metrics tell an unambiguous story. Disney trades at a price-to-book multiple of 1.84 and a price-to-sales ratio of 2.2—both substantially more reasonable than IMAX’s corresponding valuations of 5.8 and 5.5. On a forward price-to-earnings basis, the gap widens further: Disney at 17x versus IMAX at 22x.

This valuation disparity becomes even more striking when accounting for Disney’s asset base and revenue diversification. The company monetizes intellectual property across theatrical releases, streaming platforms, theme park experiences, merchandise licensing, and broadcast sports—creating multiple growth vectors.

IMAX, by contrast, concentrates its earnings power in a single, albeit well-executed, business model dependent on cinema exhibition trends.

The Clear Winner for Long-Term Capital Allocation

While IMAX merits recognition as a competently managed enterprise with genuine near-term tailwinds, Disney operates on an entirely different magnitude. The “House of Mouse” commands a far deeper moat, a more resilient operating model, and superior financial returns potential.

Investors tempted by IMAX’s recent spectacle would be wise to forget the allure of a one-trick performer. Disney’s diversified empire, established market dominance, and attractive valuation metrics on strong fundamentals make it the superior choice for equity allocators seeking meaningful exposure to the entertainment sector.

The choice, ultimately, favors the established entertainment dynasty over the specialized exhibitor.