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Why You Should Avoid AMC Stock Despite a Strong First Quarter

InvestorPlace2022-05-12

AMC Entertainment’s(NYSE:AMC) first-quarter results showed rebounding sales with a healthy loss reduction as it looks to return to winning ways in the post-pandemic world.

During the first quarter, company sales shot up to$785.7 million, over five times the figure from the same period last year. Moreover, it came in ahead of $743.4 million analyst consensus estimates. Additionally, net losses shrunk from $567.2 million to $337.4 million.

AMC has benefitted immensely from an incredible film slate, starting with the latest Spider-Man movie in December. The movie ended up being the sixth highest-grossing film in history. The Batman followed it up. The latest smash-hit from Marvel, Doctor Strange in the Multiverse of Madness, made $185 million in its opening. AMC performed significantly better with the film with a 26% domestic market share, a 4% bump from its historical average. Moreover, with a strong upcoming lineup of films, AMC expects a robust showing this year.

Is AMC stock a buy then? Not quite. For starters, domestic box office collections are roughly 75% lower than pre-pandemic levels for the second quarter running from April to June. Hence, the talk about the massive recovery seems far-fetched.

Moreover, the theatre giant still has a sizeable amount of debt to pay off and will need more funding to sustain operations. Its recent unrelated investment in gold miner Hycroft Mining(NASDAQ:HYMC) suggests it must keep itself relevant with the retail trading crowd. AMC will perhaps have to issue new equity and its meme stock status will help with that. Overall, despite a relatively strong performance, it’s best to avoid AMC stock.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment18

  • yngwin111
    ·2022-05-12
    What's are u trying to say 🤣
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  • limpeh
    ·2022-05-12
    To the moon!
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  • limpeh
    ·2022-05-12
    To the moon
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  • Zaidie
    ·2022-05-12
    Eh this article like cheebye only
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    • AnthonyC
      Bad articles about AMC everywhere
      2022-05-12
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  • JcJc
    ·2022-05-12
     Nothing can do ! Just HOLD!!!
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  • Skai
    ·2022-05-12
    Why You Should Avoid Shill Article Despite You Need to Cloak Your Daily Tiger Tasks$AMC Entertainment(AMC)$
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  • Dragonbody
    ·2022-05-12
    [What] [What] [What] 
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  • DragonKC
    ·2022-05-12
    AMC to the moon. Only AMC investors know how to invest. 
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    • jimmylaw
      like
      2022-05-12
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  • roryedwards
    ·2022-05-12
    Woo more fud
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  • hotheadz88
    ·2022-05-12
    Sell
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  • Remotecam
    ·2022-05-12
    Another smart analyst shorting $AMC Entertainment(AMC)$stock but constantly getting squeezed not understanding why why why... LOL
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    • michaelchan8
      they r just mouthpiece for their overlord.
      2022-05-12
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  • Rem35
    ·2022-05-12
    Buy the dip
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  • Chris Tan
    ·2022-05-12
    Capital flight 🏃‍♂️🏃‍♂️🏃‍♂️
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  • breAkdaWn
    ·2022-05-12
    Hold
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  • Nase
    ·2022-05-12
    Buy 
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  • michaelchan8
    ·2022-05-12
    Welcome to the "why you should avoid/forget AMC" article for the 2748427 times since the run up last year.
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    • Skai
      Lol. I guess the number is higher!!
      2022-05-12
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  • Patek1975
    ·2022-05-12
    To the moon 
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  • V K
    ·2022-05-12
    Pls like tyvm[Happy] 
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    • kerukel88
      Ok
      2022-05-12
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    • Tigaa
      ok
      2022-05-12
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