Since the pandemic delivered a crushing blow to the world’s largest movie theater chain, AMC Entertainment (AMC), the company has been in survival mode. The initial shutdown of thousands of theaters cost the company billions, and just as it began to recover after gaining popularity among retail investors as a meme stock in 2021, Hollywood was hit with another crisis in 2023 as a result of prolonged strikes by writers and actors that brought film production to a standstill.
A weak box office, towering debt, and relentless shareholder dilution in a desperate bid to stay afloat have kept AMC’s stock under pressure for more than three years. Yet, the tides may be shifting. The company has been gradually improving its fundamentals, and last year’s domestic box office rebound during the Thanksgiving period provided a much-needed boost. Plus, with analysts projecting 2025 to be another strong year for the movie industry, AMC could be staging a comeback.
So, as the theater chain prepares to release its fourth-quarter results later this month, here’s a closer look at the stock.
About AMC Entertainment Stock
Kansas-based AMC Entertainment (AMC) is the world’s largest movie theater chain, boasting around 900 locations and 10,000 screens across the globe. The company has redefined the moviegoing experience with luxury recliner seating, elevated food and beverage options, immersive premium formats, and a strong digital presence. With loyalty programs, subscriptions, and a diverse content lineup ranging from Hollywood blockbusters to indie films, AMC continues to set the standard for cinematic innovation.
The company’s market cap presently stands at approximately $1.3 billion. Shares of movie theater giant and meme stock sensation have been in hot water over the past year amid struggles in the entertainment industry. Slipping almost 26% over the past year, AMC has massively lagged behind the broader S&P 500 Index’s ($SPX) 23.5% return during the same stretch. So far in 2025, the stock has dipped roughly 10.7%, while the broader market has returned almost 4% on a YTD basis.
Given the company’s underwhelming price action, when it comes to valuation, AMC appears to be a bargain. Trading at just 0.25 times sales, AMC is priced well below its sector median of 1.37x as well as its own five-year average of 2.45x.
AMC Entertainment Beats on Q3 Earnings
While AMC’s fiscal 2024 third-quarter earnings release, published on Nov. 6, didn’t do much to lift investor sentiment toward the company, it still revealed a somewhat optimistic picture. Total revenue of $1.3 billion dipped 4% year-over-year but narrowly edged past Wall Street’s projections. On an adjusted basis, the company incurred a loss of $0.04 per share, which was better than last year’s loss of $0.09 per share and Wall Street’s forecast loss of $0.07 per share.
Furthermore, the company highlighted in its Q3 earnings release a few key milestones in its post-COVID recovery journey. Despite posting a net loss, AMC achieved its second-best adjusted EBITDA performance for any third quarter in its 104-year history. Along with the reduction in losses, the company said that its adjusted EBITDA of $161.8 million grew fourfold compared to the previous quarter. This positive momentum is largely attributed to an industry-wide box office rebound.
Additionally, AMC made great strides in strengthening its balance sheet, with a major debt restructuring in July extending $2.4 billion in long-term debt maturities to 2029 and 2030. The company also reduced its outstanding debt by $349 million through strategic capital market efforts, including debt buybacks and equity exchanges. As of Sept. 30, AMC reported a healthy cash position, with cash and cash equivalents totaling $527.4 million.
Dear AMC Stock Fans, Mark Your Calendars for February 25
While AMC’s third-quarter earnings certainly highlighted progress in several key areas, the company also acknowledged “that some of our third quarter metrics of 2024 were behind those of last year.” Yet, management remains optimistic for the future. AMC expects a substantial boost in industry-wide box office numbers for fiscal 2024, with even more growth anticipated over the next two years.
In fact, it's worth mentioning that on Dec. 2, shares of AMC popped nearly 2% after the company revealed it had set new all-time records during the 2024 five-day Thanksgiving holiday period, with a massive 8.8 million moviegoers attending its theaters worldwide. The company is all set to lift the curtains on its fiscal 2024 fourth-quarter earnings release after the market closes on Tuesday, Feb. 25.
Ahead of this event, analysts are calling for a staggering 70.4% year-over-year improvement in the company’s loss per share. Meanwhile, for fiscal 2024, Wall Street projects AMC’s loss to narrow by almost 27.4% annually.
What Do Analysts Expect for AMC Entertainment Stock?
According to Benchmark analyst Mike Hickey’s recent analyst note, AMC Entertainment is poised to capitalize on a box office rebound in 2025. With a blockbuster lineup featuring films like Mission: Impossible 8, Jurassic World 4, and Avatar 3, Benchmark believes AMC is set for a multi-year recovery, with 2025 projected to see a significant boost in domestic box office earnings, reaching $9.5 billion, a solid 11% increase from 2024.
The analyst also noted that AMC is strategically investing in enhancing the moviegoing experience, with plans to allocate up to $1.5 billion over the next four to seven years towards premium screens, laser projection, and upgraded seating. Additionally, the company’s efforts to diversify its revenue streams, including expanding its home popcorn business, are expected to support its long-term financial growth and stability.
Yet, Wall Street remains somewhat bearish on AMC stock, maintaining a consensus rating of “Moderate Sell” overall. Of the six analysts offering recommendations, four advise a “Hold,” and the remaining two maintain a “Strong Sell.” The average analyst price target of $3.61 indicates potential upside of 3.7% from current levels, while the Street-high target of $4 signals that the stock can rally as much as 15% from here.
Even though AMC’s recovery prospects are strengthening, especially with a promising 2025 film slate and strategic investments in enhancing the moviegoing experience, investors should proceed with caution. Despite optimistic projections for the upcoming quarter, the company’s financials have taken massive hits in recent years amid lingering challenges in the entertainment industry. To that end, as the company prepares to release its fourth-quarter earnings report on Feb. 25, it’s crucial for investors to closely monitor these results for further signs of progress before making any bold moves.
