AMC’s Q2 Results Beat Estimates; Shares Rise 5.3%

Global movie exhibition company AMC Entertainment Holdings, Inc. (AMC) has reported better-than-expected results for its second quarter ended June 30, 2021. The strong results were driven by growth in revenues. Following the news, shares of the company jumped 5.3% on Monday and close at $35.60 in extended trade.

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AMC reported quarterly revenues of $444.7 million, surpassing the Street’s estimate of $375.28 million. The company had posted revenues of $18.9 million in the same quarter last year. Gradual reopening of theatres helped all revenue segments to witness growth, especially Admissions revenue, which stood at $233 million versus $0.9 million a year ago.

The company reported narrower-than-expected earnings per share (EPS) loss for the second quarter. Its loss per share stood at $0.71 against analysts’ estimates of a loss of $0.93 per share. AMC had posted a loss of $5.44 per share last year.

The CEO of AMC, Adam Aron, said, “We raised yet another $1.25 billion of new equity capital (before commissions and fees) in the quarter, boosting our quarter ending liquidity to more than $2 billion (including cash and undrawn revolving lines of credit) which is about double the previous highest ever such mark in AMC’s 101-year history. Thanks to increased vaccination counts in the countries we serve, we started to see rising movie going demand, and we safely welcomed more than 22 million guests back to our theatres across the globe during the course of the second quarter.” (See AMC stock chart on TipRanks)

Two months ago, Loop Capital Markets analyst Alan Gould reiterated a Sell rating on the stock with a price target of $1, implying downside potential of 97% from current levels.

The analyst said, “Eventually the valuation will reflect the fundamentals. We expect this to occur by the time box office returns to normal, sometime over the next year, when shareholders recognize what little cash flow per share remains for the equity holders after debt expense; we just don’t know the path of the stock price between now and then.”

Consensus among analysts is a Hold based on 1 Buy, 4 Holds and 3 Sells. The average AMC price target of $5.84 implies downside potential of 82.7% from current levels. Shares of the company have gained 656.2% over the past year.