Canaccord Analyst: MoviePass Could Be The Catalyst A Stale Movie Theater Sector Needs

Helios and Matheson Analytics Inc (NASDAQ: HMNY)’s MoviePass could provide a major growth catalyst for a challenged theater environment, according to Canaccord Genuity. 

The Analyst

Austin Moldow of Canaccord Genuity initiated coverage on Helios and Matheson with a Buy rating and $15 price target.

The Thesis

The MoviePass unlimited subscription system could provide the lagging theater sector with a customer boost, with Helios and Matheson profiting from the upside associated with higher theater usage, Moldow said in a Thursday note.

Canaccord estimates that only 15 percent of theater seats are filled annually. MoviePass — which offers effectively unlimited movie access for $10 per month — could incentivize consumers to “seek out the big screen," the analyst said. 

“We think MP can be an efficient demand generator and inventory manager for movie theatres and can participate in the upside.”

MoviePass recently exceeded 2 million subscribers, but Moldow forecasts that this figure could grow to 5 million this year and to 12 million through 2022.

A larger subscriber base could give Helios and Matheson bargaining power and increased efficiency from scale, Moldow said. 

A larger user base could also become an attractive promotional target for movie studios, potentially bringing in ad revenue, he said.

Price Action

Helios and Matheson shares were up 9.11 percent at $4.91 at the close Thursday. 

Related Links:

How Does Helios And Matheson Make Money From MoviePass?

MoviePass Expands Revenue Source With Distributor Deal