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Shares of movie theater technology company Imax (NYSE: IMAX) shot higher on Wednesday after the company reported financial results for the fourth quarter of 2023, beating expectations. As of 10:40 a.m. ET, Imax stock was up 10%.

Imax has growth and profits

Imax makes money both by installing its premium equipment in theaters and from films that have been enhanced for Imax. The company saw growth for both segments in 2023. Not only that, its full-year gross profit margin increased in both segments as well.

For the year, Imax generated revenue of $375 million, which was up 25% year over year. Its full-year gross margin was 57% -- a substantial improvement from its gross margin of 52% in 2022. And the top-line growth and margin improvement resulted in net income of $25.3 million compared with a loss of $22.8 million in 2022.

It was a dramatic improvement for Imax across the board, and it's why the stock is up today.

Imax stock is still cheap

Imax management didn't give hard numbers for its financial guidance for 2024. But reading between the lines, the company expects stability -- investors should expect modest revenue growth at best and similar profit margins.

However, Imax's market cap is still only around $950 million as of this writing. Compared with its profitability, that's fairly inexpensive. Moreover, management is authorized to repurchase $151 million in shares, which could provide a boost to shareholder returns, depending on how aggressive management is with this in the coming year.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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