To The Moon

$AMC Entertainment(AMC)$ is expected to report its quarterly results on 02 August for the period ending 30 June 2024 after market close.

Market is expecting AMC to report a fall in quarterly revenue with a 23.4% decrease in revenue to $1.032 billion from $1.35 billion a year ago, AMC's guidance on July 24 2024, for the period ended June 30, was for revenue of $1.031 billion.

The earning per share is estimated to come in for a loss of 43 cents.

Did Not Recover From Cash Burn Post Pandemic

AMC has been known to be grappling with billions of dollars of debt burden and continues cash burn. AMC has struggled to keep its theaters open and running during the coronavirus pandemic due to reduced footfall and a thin slate of movie release.

AMC has reduced its debt by $1 billion since the beginning of 2022. But problems for the company did not end, as the Hollywood strikes in 2023 delayed the number of major film releases, leading to AMC giving a warning that the second-quarter could be weaker compared to 2023.

This concern is not unfounded because if we looked at the market share as of 2023, AMC still have a significant 35% at the end of Q1 2024, but Lion Gate is catching up, compared to 2023, AMC has reduced the market share a little.

I am expecting AMC to lose more market share and there might be announcement in their guidance that more theatres might be closed.

AMC Entertainment (AMC) Price Target

Based on 6 Wall Street analysts offering 12 month price targets for AMC Entertainment in the last 3 months. The average price target is $4.64 with a high forecast of $8.00 and a low forecast of $3.20. The average price target represents a -9.38% change from the last price of $5.12.

I think the price target have been generous for AMC, I am expecting AMC to trade much lower, so I would think this stock is worth to be shorted.

AMC More Than 15% Negative Return Would Continue

I would think AMC could be trading down towards $4, when it release its second quarter result. There will be more reduction of their operations and we might see AMC reducing their market share of theatre in America.

The trend of movie going have changed drastically because now quality presented by online streaming have been getting better with the hardware and software technology, so I would think AMC need to relook into their strategy whether they would want to restructure the way they run the movie business.

Technical (MACD and KDJ)

From what we are expecting from AMC quarterly result, technical is showing that MACD is trying to see if a rebound is possible, but KDJ is showing some potential upside.

But with the loss making company It would be hard for AMC to stay above $7, so I would be monitoring to look out for a short position on this stock.

Summary

AMC cash burn during the pandemic have not been addressed, so they might have missed the golden period to turn around.

For them to stage a comeback, it would be harder with the economic uncertainty as inflation might be creeping back. So I would be looking out to see if AMC is worth a short.

Appreciate if you could share your thoughts in the comment section whether you think it is a time to short AMC?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.