AMC Stock Is Up 28%. But Is It a Buy?
The movie theater chain has been moving higher the last two months. Potent catalysts can keep the upticks coming.
There's still time for a Hollywood ending for AMC Entertainment (NYSE: AMC). The multiplex operator may be trading more than 99% below the split-adjusted high it reached four summers ago, but momentum is on its side these days. AMC stock has risen 28% since bottoming out two months ago.
The bullish turn might not seem apparent at first. Revenue declined last year, and it has now clocked in negative in four of the last five quarters. Trailing revenue is 17% below its 2019 peak. AMC hasn't delivered an annual profit since 2018. One can argue that AMC is simply rallying alongside the overall market, but there are some potential catalysts fueling the lift. Eyes on the screen. The movie could be just getting started.
This year got off to a slow start at the local multiplex, and it translated into a rough first quarter for AMC. Year-over-year revenue declined 9%. Its net loss and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) deficit widened. Thankfully traffic picked up on the heels of some tentpole releases during the current quarter.
