Unfortunately, I have no way to sugarcoat this. There’s only one way to describe AMC Entertainment Holdings Inc (NYSE:AMC), and that’s bad. Yes, AMC stock is up nearly 15%, which is quite respectable given the circumstances impacting the broader markets. However, these shares have killed many a portfolio.

In 2017, AMC suffered a catastrophic erosion of market value, hemorrhaging almost 54%. You know you’re having a bad year when going sideways is considered a godsend. The only real positive is that most analysts have dim expectations for the movie industry. For instance, Lions Gate Entertainment Corp. (USA) (NYSE:LGF.A,NYSE:LGF.B) is down sharply this year.

Even powerhouse entertainment giant Walt Disney Co (NYSE:DIS) has only offered a wild ride for its shareholders. So no one applies any pressure for AMC stock to perform. That’s the good news. The bad news is that the company needs to get its stuff together soon or risk alienating long-embattled shareholders.

However, the road to recovery will be a contested one. Primarily, we have the problem that fewer Americans today want to go to the movies. Over the years watching films, and at AMC Theatres in particular, I noticed a peculiar trend. Prior to a movie starting, either the producers or the actors of the film would thank the audience in a pre-recorded message. It sounds like desperation, and that’s exactly what it is.

According to a survey earlier this year, 54% of American adults prefer to watch movies at home. Only 22% equally watch at home and in the cinema. Only an alarming 13% prefer to watch movies the way they’re meant to be watched — with crying kids and people asking, “what’d she say?”

Despite the ugly, it might be time to consider speculating on AMC stock.

Risky but Potentially Rewarding Play for AMC

Before I get into my bullish, but very speculative case for AMC stock, let me address two disclosures. First, I haven’t been dropped on the head so this is a rational argument. At least, I intend it to be as such. Second, I have a personal, non-investment-related stake in the company.

Bottom line: I don’t want to see this company fail, and therefore, I have a positive bias towards AMC stock.

That said, the extreme bearishness towards this cinema group ignores critical changes that’s occurring in the film industry. One of the biggest is that movie studios apply data analytics to determine what film categories would be most popular.

Have you heard the common complaint that Hollywood just rehashes old titles? It’s because that’s what the audience wants.

From 1995 until now, the top five movie categories that people have wanted to watch are: adventure, action, drama, comedy and thriller/suspense. Tellingly, the top ten movies of 2000 featured cinematic diversity. The action genre led, but we also saw a few adventure, drama, and comedy films. Last year, action films took six of the top-ten grossing movies.

Cinematic artistry is dying, but at least Hollywood is giving audiences what they want. That in turn translates to higher demand for AMC stock.

Experts predict that by the end of this year, Hollywood will generate more than $12.8 billion at the box office. You’d have to go back to 2004 when the film industry exceeded this figure.

With exciting titles down the pipeline, along with another Star Wars installment in May, you have to like Hollywood’s chances. That adds up to more positives for AMC stock that the bears ignore.

Subtle Changes for AMC

What I just discussed are macro-level developments that could boost AMC. However, the company is making subtle changes that aid profitability and improve sales efficiency.

For instance, my local AMC Theatres is situated in an affluent part of town with old retirees. Understanding this demographic, this particular location will frequently run classic films during the weekdays. Last year, I attended a special showing and I was surprised to see the robust turnout.

Further, because this location is close to where several Chinese immigrants and students live, AMC will play Mandarin and Cantonese language films. As I mentioned before, the company makes smart decisions based on their data analytics.

By no means is AMC stock a perfect investment. Indeed, despite my personal bias, it’s a risky proposition. But to be fair, don’t make the mistake that this is an organization destined for failure. While the movie industry looks grim, the finer details reveal frequently ignored tailwinds.

As of this writing, Josh Enomoto has a financial interest in AMC Entertainment Holdings Inc.