It’s no secret AMC (NYSE:AMC) stock is not doing well right now. It’s down 47% year-to-date (YTD) and 93% in the last 12 months. Now, AMC is down 94% in the past five years. Its stock declined after Q1 results were released last week. This happened despite it exceeding consensus estimates for revenue, adjusted EBITDA, net income and diluted earnings per share (EPS).
Nowadays, at-home streaming services offer blockbuster quality films. And major movie studios make their in-theater films available on streaming services much sooner. Plus, attending the movies has become far too expensive at a time when people are budget trimming.
Therefore, plenty of opportunity is on the table for other media companies to benefit. So, instead of buying AMC stock, you should look at these three media stocks to buy instead.
Sony Group Corp (SONY)
This week’s breaking news in media was Sony’s (NYSE:SONY) announcement of its attempt to acquire Paramount (NASDAQ:PARA). SONY, led by its bidding group Sony Pictures Entertainment and private equity firm Apollo, offered $26 billion in cash.
Paramount owns several well known channels including Nickelodeon, MTV, CBS and Paramount Pictures. But it has struggled to remain profitable thanks to the decline of cable TV and the underperformance of its streaming service. Sony’s offer has strong support from many Paramount shareholders, who would prefer it to the alternative of a Skydance merger.
While SONY is down both YTD and in the last 12 months, it is up 70% in the last five years. Considering Sony Group Corp. is involved in many media types like video game software, electronics manufacturing and music, it remains diversified. Thus, this could help protect its overall stock price against major changes in any one sector.
Reddit (RDDT)
For investors who want to take a little bit more of a risk, consider Reddit (NYSE:RDDT). On Monday, Bank of America (NYSE:BAC) raised its target price on Reddit from $45 to $50 per share, maintaining a neutral rating. Then, the company’s debut earnings report came out on Tuesday, and the stock climbed 9% to $51.33.
Revenue increased 48% to $243 million for the first quarter year-over-year (YOY). That beat analysts’ estimates by 14%. Importantly, it reported an ad revenue increase of 39%. However, it showed an overall net loss of $575.1 million. Still, the number of average daily users was 8% higher than expected.
Compare Reddit to the other social media stock that had an IPO this year, Trump Media & Technology Group (NASDAQ:DJT). It just had its accounting firm charged with massive fraud. Thus, RDDT definitely looks like a much stronger bet.
IMAX Corp (IMAX)
It might seem counterintuitive to suggest a movie-related media stock after lamenting the recent dramatic reduction in theater attendance. But IMAX Corp (NYSE:IMAX) may offer a unique way to see profits in this industry in the future.
The company collected $1.06 billion worldwide in 2023, the second-largest year in its history. Ticket sales were up 24% from 2022. Also, IMAX saw net income of $25 million in 2023, a turnaround from the previous year’s loss of $23 million.
Many people now view a trip to the movies as a special treat, with some choosing films in IMAX theaters to enhance viewer experience. For example, in 2023, IMAX was touted as the best way to watch Oppenheimer. The movie was IMAX’s biggest earner in 2023, generating $183.2 million from IMAX screens. Also, it pushed the company to its highest-grossing summer ever in 54 countries, including the U.S. and China.
If IMAX can capture this enthusiasm and translate it into partnerships with more theaters and production companies, it could lead to a decidedly profitable future.
While its stock has been down for the last five years, it is up 13% YTD. But considering four of those years were during the pandemic, that’s not surprising. Therefore, the future could be bright for the movie industry’s brightest screens.
On the date of publication, Philippa Main did not hold (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 InvestorPlace.com Publishing Guidelines.
