Why National CineMedia Shares Jumped Today

What happened

Shares of National CineMedia (NASDAQ: NCMI) came back to life on Monday, trading 15.6% higher as of 3:30 p.m. EDT. The struggling stock took a rare leap upward thanks to a stronger-than-expected first-quarter report.

So what

The leading provider of pre-show advertising for the silver screen saw first-quarter sales rise 8% year over year, landing at $80.2 million. On the bottom line, the year-ago period's $0.02 loss per share increased to an adjusted net loss of $0.03 per share. The analyst consensus was calling for a net loss of $0.05 per share on something like $75 million in top-line revenues.

Movie theater packed with smiling viewers.

Image source: Getty Images.

Now what

Early 2018 has been jam-packed with advertiser-friendly blockbuster fare, and that's obviously good news for in-theater advertising managers like National CineMedia. Eyeball magnets like Black Panther and Avengers: Infinity War have been kind to the movie industry in general, offering a break from a multi-year downward trend in ticket sales.

The company is also trying out some new ideas, including an ad management platform that lets advertisers place their screen-time orders much closer to the desired screening dates than before. So far, so good as ad clients have responded with an influx of last-minute orders in the early going -- but again, much of that action was probably motivated by a handful of good-looking blockbusters.

It's nice to see some positive news around this long-suffering company, but I would still be uncomfortable with investing in National CineMedia. The company needs to prove that its newfound strength is sustainable and that it can survive a dry spell with fewer surefire audience favorites. All told, the stock is still trading 24% lower over the last 52 weeks and 61% lower in a five-year perspective.

10 stocks we like better than National CineMedia
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and National CineMedia wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 2, 2018

Anders Bylund 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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Stocks
Referenced Symbols: NCMI

More from Motley Fool


Motley Fool

Motley Fool

Market News, Investing

Research Brokers before you trade

Want to trade FX?