Should You Be Buying Cineworld Stock Right Now?

April 7, 2022

Cineworld’s share price is currently worth only a third of what it was a year ago. This can be put down to numerous things but is mainly due to cinemas being closed down in the wake of Covid-19. The Cineworld Group (LSE: CINE) share price continues to struggle to gain momentum despite theatres being open again to the general public. With the share price being so low, is now the time to buy this recovering stock?

Is Now The Time?

While the world continues to adapt to a new normal, many people have questioned the future of movie theatres.

With the rise of subscription streaming services, some forecasters predict that cinemas will become obsolete in the future.

Others suggest there will be a major comeback. There’s also the question of sitting in an enclosed space with complete strangers to enjoy a movie. Will people return to cinemas as they did before or will people become more cautious due to health reasons?

Despite all of this, Cineworld reported that their admissions increased by 75% in 2022 as cinema-goers flocked back to theatres following the ease of lockdown restrictions.

Cineworld continues to take on a proactive and positive approach to the public, noting that they are optimistic for the future of cinema and Cineworld as a whole.

Is Cineworld A Risk?

While it can be tempting to invest in Cineworld stock due to the price being so low and appealing, it’s important to remember that Cineworld is currently clawing its way out of millions of pounds of debt.

With the cost of living continuing to rise, there’s always the question of whether or not people will be able to afford to go to the cinema anymore. What was once a fun day out for families has now turned into an expensive ordeal. These are all things to consider when thinking about purchasing Cineworld stock.

Either Cineworld will make a tremendous come back or they will continue to decline. With their share price being so low, the risk / reward balance is interestingly poised.