AMC’s Q3 Results on Deck: Will Mem Stock Darling Overcome Concerns of Box Office Slowdown? | Techno Glob


AMC Entertainment Holdings Inc. Reports third-quarter results on Nov. 8, with the meme stock darling expected to post a narrow loss, despite a “low” number of new movie titles in the quarter.

The movie theater operator suffered from pandemic-era lockdowns before achieving meme stock status that sent its stock skyward last year, then came crashing back down.

Analysts surveyed by FactSet are looking at AMC AMC,
-5.61%
to report a net loss of $199 million, or 18 cents per share, after a loss of $224 million, or 27 cents per share, in the year-ago quarter. The company is expected to report sales of $961 million, up from $756 million in the same period last year, according to FactSet.

Look now: AMC stock sinks to ‘meme stock’ level earlier as Bayley cuts price target by 32%

AMC’s admissions revenue is expected to be $552 million, compared with $421 million in the same period last year, FactSet data shows. Analysts project discount sales of $324 million, up from $263 million in the year-ago quarter.

In its second quarter, AMC reported a narrow loss that beat expectations and revenue in line with analysts’ forecasts. However, it said that the third quarter of this year will be relatively quiet in terms of big film releases. In August, when AMC reported the results, CEO Adam Aaron spoke of a “lack” of new major movie titles being released that month and in September, adding that “things will be slow for several weeks.”

In a note issued last month, Bay Riley analyst Eric Wold lowered his AMC price range, citing concerns that the post-pandemic box office recovery will take longer than previously forecast. He warned that the number of films released in cinemas remains around 50% of pre-pandemic levels.

Look now: Have you tried to buy AMC’s new APEs? Be prepared to lose everything, the company warns

“We now believe it may not be until 2024, before the domestic box office can again exceed $11 billion—as was the case every year between 2015 and 2019,” Wold wrote. The price drop pushed AMC’s stock to far-off “meme stock” levels.

However, the past few months have been eventful for AMC. The company’s AMC Preferred Equity Units, or APEs, began trading in August, sparking volatility and opening the latest chapter in an eventful journey that has taken the cinema chain from pandemic victim to meme-stock phenomenon. delivered

With its APE equity unit, AMC made something like a 2-for-1 stock split, marking the company’s latest effort in fighting over stock issuance. AMC is also taking aim at its huge debt burden with the APA Special Dividend. The name is a nod to the investors who bought the company into meme stock, who often refer to themselves as “Monkeys” or “Monkey Nation”. AMC issued an APE for each of approximately 517 million shares outstanding.

Look now: Is the Golden Age of the Memo Stock Rally Over?

However, APEs have fallen 71.4% since their inception. Profits rebounded from an early low of $10.50 on October 13 of $1.48 and an intraday high of $10.50 on August 22.

In September AMC also planned to sell up to 425 million EPAs to each other, sending equity units to a new low.

AMC’s stock has fallen 65% this year, outperforming the S&P 500 index’s SPX,
-2.50%
A decrease of 20.8% during the same period. Over the past three months, AMC has fallen 47.7%, compared to the S&P 500 index’s fall of 9.2%. Fellow meme stock GameStop Corp.’s GME,
-6.27%
The stock has fallen 29.5% in the last three months.

Look now: Is the Golden Age of the Memo Stock Rally Over?

A big question mark still hangs over AMC’s long-term profitability, according to Dan Raju, CEO of cloud-based financial services provider Trader. “The stock prices of EMC and GameStop have been artificially inflated because of the recall that followed,” Raju told MarketWatch via email. “While movie theater attendance appears to be returning to pre-pandemic levels, AMC continues to struggle to show a clear path to continued profitability.

“While I do not expect a meme stock rally like we saw in 2020 and 2021, we will see short-term meme behavior with AMC stock because of its current popularity among those who engage in momentum trading. ” he added.

While AMC remains a cause for a vocal community of individual investors, the company’s financial health is a cause for concern, according to data from Rapid Ratings, a company that evaluates the finances of public and private companies.

Of the eight analysts surveyed by FactSet, three have a hold rating and five have a sell rating for AMC.



Source link