AMC Stock: 3 Key Things to Watch When AMC Reports Earnings Nov. 8

  • AMC Entertainment (AMC) will report third-quarter earnings tomorrow.
  • Analysts expect revenue of $961.09 million and an EPS loss of 24 cents.
  • AMC stock is down by more than 75% year-to-date (YTD).
AMC theater in Glendale, Arizona. AMC stock.
Source: JJava Designs / Shutterstock

All eyes are on AMC Entertainment (NYSE:AMC) after the company confirmed that it will report third-quarter earnings tomorrow, Nov. 8, after the market close. Meanwhile, shares of AMC stock are down more than 75% year-to-date (YTD). Much of this decline can be attributed to the issuance of 517 million APE units, which were issued as a dividend to AMC shareholders. At the time, the theater chain stated that the dividend would be “be similar to a 2/1 stock split.”

AMC fans are slightly cautious about the quarter. CEO Adam Aron recently explained the following:

“For full transparency, there is a dearth of new big movie titles being released in August and September, so things will slow for several weeks, but then comes Q4.”

With that in mind, let’s take a look at three metrics to watch for AMC’s upcoming earnings.

AMC Stock: 3 Key Things to Watch When AMC Reports Earnings

For Q3, analysts forecast revenue of $961.09 million, which would imply year-over-year (YOY) growth of nearly 26%. The highest estimate sits at $1.01 billion while the lowest is $856 million.

Meanwhile, analysts also expect an EPS loss of 24 cents compared to the 44 cent loss a year ago. The high EPS estimate is a loss of 12 cents while the lowest is a loss of 31 cents. Profitability is still a concern for the theater chain. Health and sanitation programs to improve customer experiences will likely drive expenses.

Shareholders are looking forward to Q4 guidance, however. Aron noted the following during Q2 earnings:

“Looking ahead, we could not be more bullish about the probability of significantly improving operating results for AMC, beginning with Q4 of 2022 and continuing in 2023.”

For Q4, analysts expect revenue of $1.23 billion and an EPS loss of 12 cents. That would bring full-year revenue to $4.13 billion — up more than 63% YOY — and the full-year EPS loss to $1.24 compared to -$2.66 in 2021. For 2023, analysts also guide for revenue of $4.78 billion and a full-year EPS loss of 40 cents.

On top of all of this, AMC stock could experience a short squeeze if the company beats on earnings. Short interest as a percentage of float tallies in at 20.24%, equivalent to 104.36 million shares shorted. The number of shares would take 2.7 days to fully cover, while the short interest figure is more than enough to drive a squeeze.

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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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