AMC Entertainment Holdings, Inc. is an American company that began in 1920 in Kansas City, Missouri.
entertainment
Mark Pukhov
September 23, 2024
as of december 31, 2023
AMC stock hit this all-time high On June 2, 2021—an astronomical rise fueled by retail enthusiasm.
So, behind the memes and the noise, what story will AMC’s financial health tell us now, since more than three years have passed already?
as of september 23, 2024
2020
2021
2022
2023
2019
The P/E ratio is negative due to ongoing losses, making traditional valuation metrics about as useful as a screen door on a submarine.
2018
-0.97
-0.4
-1.3
-4.6
-0.15
0.11
3.91
4.81
2.53
1.24
2020
2021
2022
2023
2019
5.47
However, using the price-to-sales ratio, which is currently at 0.37, we see that AMC’s market cap of $1.68B is far lower than its revenues.
2018
5.46
worst case
$11.34
base case
$16.23
best case
$25.85
On paper, this suggests that the stock is undervalued—if the company can reverse its losses. Intrinsic value estimates support this view:
-0.63
-0.21
-0.61
-1.13
2020
2021
2022
2023
2019
0.58
Meanwhile, AMC faces challenges like liabilities exceeding assets and cash consumption by operating activities.
2018
0.52
This means crucial metrics like the price-to-book ratio, and price to free cash flow cannot be calculated.
It also becomes pointless to calculate ROE as it would mislead investors, so this time we'll rely on ROA, which reflects AMC's losses.
-10.7
-4.4
-11.7
-44.7
2020
2021
2022
2023
2019
-1.1
2018
1.16
Further, the company's credit agreements prohibited it from paying dividends on April 24, 2020, and only one special dividend was issued in 2022.
0.7
0
0
6.5
2020
2021
2022
2023
2019
84.1
2018
258.1
Despite lacking retained earnings, AMC’s cash pile is growing, mainly through borrowing—like using one credit card to pay off another.
0.88
2020
2021
2022
2023
2019
2018
0.63
1.59
0.31
0.26
0.31
The company has steadily trimmed its losses since 2020, so operating and net margins are still negative, though moving in the right direction.
-13.4
-1.54
-36.8
-330
2020
2021
2022
2023
2019
2.5
2018
4.8
The key question for retail investors is whether financial improvements will come quickly enough to justify a long-term investment.
-25
-50.2
-369
-2.7
2
2018
2019
2020
2021
2022
NET MARGIN (%):
-8.2
2023
Although AMC is facing struggles, institutional investors still hold stakes in the company, indicating that some players see potential—albeit likely for different reasons than retail investors.
So, is AMC stock worth buying? The answer largely depends on your appetite for risk. Projections suggest that AMC’s stock could rise to $9.45 by 2025 and potentially soar to $264.24 by 2030.
However, these long-term estimates are speculative, with the stock having 11 sell ratings and 6 neutral ratings, according to Business Insider.
as of september 23, 2024
While it’s easy to be swept up in the narrative of the meme stock resurgence, AMC is still deep in the red, struggling with losses, debt, negative profit margins, and a negative return on assets.
Yet, for those willing to take a gamble, the stock’s current price of $4.66 could be a bargain—especially if you believe in its recovery potential.