AMC Entertainment Gains Over 6% After-Hours On 4Q Revenue Beat

Shares of AMC Entertainment increased 6.5% in Wednesday’s extended trading session after the world’s largest movie theater chain operator reported stronger-than-expected 4Q revenues.

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AMC Entertainment’s (AMC) 4Q revenues of $162.5 million came in well ahead of Street estimates of $142.4 million. However, the top-line plunged 88.8% on a year-over-year basis, reflecting the adverse impact of the COVID-19 pandemic.

The company said that it was operating 394 domestic theatres as of Dec. 31, 2020, with a limited capacity of about 20% to 40%. Meanwhile, attendance dropped by 91.3% during the reported quarter. (See AMC Entertainment stock analysis on TipRanks)

The significant decline in its revenues weighed on its bottom-line as AMC reported an adjusted loss per share of $3.15, which was wider than the consensus estimates of $3.12. Furthermore, the bottom-line result compared unfavorably with the earnings of $0.35 reported in the year-ago quarter.

Notably, AMC Entertainment said that it was operating 527 of its 589 domestic locations as of March 5, 2021.

Ahead of the earnings release, Wedbush analyst Michael Pachter raised the stock’s price target to $5 (49.2% downside potential) from $2.50 and reiterated a Hold rating. In a note to investors, Pachter wrote, “We are increasingly optimistic about the exhibition industry as we approach a post-pandemic environment, but remain concerned about AMC’s debt burden.”

Overall, the Street has a cautiously bearish outlook on the stock, with a Moderate Sell consensus rating based on 2 Sells and 3 Holds. The average analyst price target of $3.83 implies downside potential of about 61.1% to current levels. AMC has rallied about 134.5% over the past year.