This year could be a good one for Imax (IMAX) - Get Report .

The large-format theater company's core business is positioned for a strong rebound, while new initiatives enter their launch phase, says MKM Partners Managing Director Eric Handler. "We see a clearer path for Imax shares to move higher over the next few quarters," he wrote in a recent note. While focus remains on the core business, the company is exploring other initiatives such as virtual reality to drive future growth.

Last month, Imax opened its first virtual reality hub in Los Angeles and is planning to debut five more VR pilot centers in the U.S., the U.K. and China by the year's end.

VR was a natural fit for Imax as its well-known brand is associated with immersive experiences says Rob Lister, the company's chief business development officer, to TheStreet.

With the Los Angeles VR hub, Imax wanted to get a "first-mover advantage" and gauge whether consumers are really interested in it, he said. If the pilot period is successful, the company could roll out VR experiences globally.

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The consumer proposition for VR has been a "difficult" one so far, Lister said. A VR headset from Oculus or HTC Vive costs upward of $600 and requires a PC with enough processing power to drive it. "That's a very expensive proposition," he said. "Our approach to this center was, let's give people an opportunity to have their first experience in VR without having to make that material investment."

The Los Angeles hub offers about 12 different VR experiences across 14 pods, costing between $7 and $15 and ranging from seven to 12 minutes. The offerings include options for multiple players, kids and sports and movie-themed games, such as its "Star Wars" experience.

In contrast, the five VR centers slated for this year in cities like New York and Shanghai will be at multiplex theaters rather than stand-alone hubs. The pods will either be in a retrofitted auditorium or located within the lobby.

VR pods could help attract consumers to movie theaters, especially Millennials. Millennials have had less movie theater experiences than previous generations because they have so many other options for content. Providing VR experiences and new digital and interactive content is a good way to keep movie theaters "vibrant," Lister said.

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Another way to lure customers into theaters is by offering exclusive content they can't get anywhere else.

Imax is testing this out with a deal with Walt Disney-owned (DIS) - Get Report ABC later this fall. The first two episodes of Marvel's The Inhumans will debut exclusively in Imax theaters in 74 countries before airing as part of ABC's fall programming.

"We think there is a real appetite for alternative content in movie theaters. It's a great way to differentiate Imax theaters from other theaters," Lister said. The company is actively looking at other projects similar to TheInhumans.

It's also shaping up to be a good year at the box office. While first-quarter box office comparisons are challenging compared to last year's, Imax's core theatrical business should rebound "quite nicely" this year, MKM's Handler said. Box office momentum should pick up in March and build into what looks like a good summer and very strong fourth quarter, he said.

Canaccord Genuity analysts echoed that sentiment. "We are going through a stretch of weak film performance," they wrote in a note. The Imax box office was tracking at $122.4 million as of Feb. 19 vs. $272 million for the full 2016 first quarter. But Canaccord expects a reversal beginning in the 2017 second quarter.

"The 2017 slate appears to be more international-friendly and more IMAX-friendly in its composition. Moreover, early signs are that we are also headed for a big 2018 slate led by the sequels to Jurassic World and Avatar as well as the next edition of Avengers, which is largely shot with IMAX cameras," Canaccord analysts Aravinda Galappatthige and Sharath Toopra said.

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The company is also optimistic about the box office this year. "We see 2017 as being a year of a lot of potential blockbusters. If you look at virtually every month of the year, there is a potential blockbuster during that month," Lister said.

Those are the types of movies that Imax usually has the most success with. "The Imax window creates a lot of buzz around movies like that," he said.

"From a risk perspective, we will watch the China box office carefully following a somewhat light 2016," Canaccord's Galappatthige and Toopra said.

For the full year, Imax box office in China was down 5% to $296 million from last year due to foreign exchange headwinds. On a constant currency basis, the China box office rose 0.5%.

China is the company's fastest-growing market, and it just passed North America for having the most Imax theaters. There are 750 Imax theaters open or in backlog in China.

Editor's Pick: Originally Published February 28.