Stocks to sell

What to Expect From AMC Entertainment Stock Q1 Earnings

Not surprisingly, AMC Entertainment (NYSE:AMC) stock is on another losing streak. And even if the company’s next earnings report shows some improvement, I’m staying away from this struggling movie theater stock.

AMC stock is down more than 45% just in the last month, falling close to $15 per share. That’s still better than where it was before the Covid-19 pandemic — and that should tell you something about AMC stock.

This is a company that was in trouble long before the pandemic shuttered movie theaters and forced everyone to lock down. Given a choice between watching a movie at home and watching one in the theater, many people are opting for the former over the latter. The seats are comfier, the popcorn is far cheaper and you don’t have to worry about crying toddlers ruining the experience (unless you have one, of course).

And while retail investors led by the crew at Reddit’s r/WallStreetBets led a short squeeze in 2021 to push AMC to more than $50 per share for a few days, it would take a miracle for the movie theater company to find and sustain those gains any time soon.

AMC reported a fourth-quarter loss of $134.4 million on revenue of $1.17 billion. And when the company issues its Q1 earnings report on May 5, it’s expected to post another loss — this time of 65 cents per share, according to Zacks.

Granted, that would be an improvement of 54% from the previous year. And revenues are expected to come in at $724.47 million, which would be up more than 388% from a year ago.

If AMC can beat those expectations, it could see a mild pop from earnings. And investors should be carefully review the company’s forecast for the second quarter and the rest of the year. The company has been on a buying spree, and recently added another seven theaters to its network in Connecticut, New York and Maryland. And it announced it was installing laser projectors in 3,500 of its auditoriums over the next four years.

There are also a number of big-ticket movies on the horizon, including Doctor Strange in the Multiverse of Madness, Top Gun: Maverick, Thor: Love and Thunder and Avatar 2 that are due to come out this year. That could have a short-term benefit to AMC stock.

But AMC is always going to be running in keen competition with streaming stocks, which I think are a better buy than traditional movie theaters these days. I’ll avoid AMC stock here.

On the date of publication, Patrick Sanders did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders.