AMC Entertainment (New York Stock Exchange: AMC) Recent Q1 results were generally solid, with headline numbers beating expectations.
Revenue increased 21.5% year over year to $954.4 million, beating Street’s estimate by $22.73 million. Adjusted net loss narrowed to $179.7 million from $266.3 million a year ago. EPS is -0.13, which is better than analysts expected -0.18.
Elsewhere, non-GAAP operating cash burn in the first quarter was $139.4 million and Adjusted EBITDA of $7.1 million compared with $223.9 million in the first quarter compared with $61.7 million in the year-ago quarter represents a significant turnaround from its EBITDA loss. .
Attendance reached 47.62 million, a continuous improvement from 39.07 million in the fourth quarter, with the US market accounting for 32.36 million (vs. 25.79 million in the previous quarter). The company also highlighted the gains made in the high-margin food/beverage segment, with his per-drink discount reaching his $7.99 versus his $7.52 last year.
So all in all, a decent read. But when scanning the print, the results barely changed her Wedbush analyst Alicia Reece’s bear paper. On the plus side, Reece expects the company to maintain at least her 22% U.S. market share this year, and European box office numbers will improve over time as AMC “updates the regional circuit.” I think so.
However, the stock price is simply too high given what stock retailers are following. This is despite her model being based on “her EV/EBITDA multiple of 13 times her EBITDA estimate for fiscal year 2025.”
“We value AMC at a premium multiple of 7x to 9x, which is the historical range pre-COVID, as a majority of retail owners rate AMC stock significantly higher than AMC’s peers.” further explained Reece.
Overall, Reece sticks to the Underperform rating and keeps the $2 price target intact. This suggests a 66% decline in the stock price over the next year. (To see the performance of the lease, click here)
Four other analysts recently agreed with AMC’s review, which split into two holds and sells respectively, with the consensus view here being a medium sell. His average target of $2.15 is a little above Leasing’s target, but that means he’ll get about a 62% discount a year from now. (look AMC stock price forecast)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. This content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.