AMC Entertainment (NYSE:AMC) is a heavily traded company that operates a movie theatre business and was one of the first meme stocks to see a huge price surge in the middle of 2021. Alongside other companies, such as GameStop (NYSE:GME), they experienced a massive short squeeze, which caused their share price to skyrocket rapidly. In the case of AMC, its share price went over $200 per share within a matter of days.
Ever since this massive short squeeze, AMC stock has been on the decline. Its overall fundamentals have never caught investors’ attention. Over this past year, its share price has lost most of its value, primarily from its failed effort to raise capital for the company by converting its shares and profitability concerns, making it a strong sell for any investor.
Investors that are seeking strong investment options within the movies and entertainment industry can look to these stable companies offering upside potential and future growth compared to AMC. Below are a few great options for alternative companies with a buy rating.
Netflix (NFLX)
Netflix (NASDAQ:NFLX) is a streaming giant that offers entertainment services such as TV shows, movies, and documentaries.
This past year, Netflix has had a considerable run, nearly doubling its share price following increased profitability and subscriber growth. Fourth quarter earnings were released on Jan. 23, stating that total revenue and subscribers increased by 13% year-over-year.
Netflix recently implemented an initiative to deal with the issue of password sharing that would give non-subscribers access to their content. This goal of cracking down on password sharing led to a large influx of subscribers to Netflix.
The significant increase in customer growth in the fourth quarter hasn’t been seen for Netflix since the Pandemic. A recent earnings beat alongside substantial share price appreciation makes Netflix a much better option than other movie and entertainment companies like AMC.
Disney (DIS)
Disney (NYSE:DIS) is an entertainment company that produces movies and television shows and operates several theme parks worldwide.
On Feb. 7, Disney reported earnings for the first quarter of 2024, in which it stated that total revenue remained practically unchanged and net income increased by 58% compared to the year before. It also announced that significant cost-cutting methods occurred this quarter, resulting in over $500 million in total savings. Disney announced raising its dividend by 50% to forty-five cents per share.
After the recent earnings report that surprised investors, its share price increased by 12%. Disney also gave investors more good news regarding their full-year 2024 projections, which expect 20% growth in overall profitability.
Disney has seen its share price increase by 14% over the past year, offering investors a much more stable option than AMC.
IMAX (IMAX)
IMAX (NYSE:IMAX) is a technology and entertainment company providing remastered films in its IMAX theater network. It also sells its products to museums, zoos, fairs, and educational centers.
IMAX reported earnings results for the fourth quarter full year 2023 on Feb. 27. stating that earnings per share dropped by 1% and total revenue decreased by 12% year-over-year. IMAX did experience decent full-year growth compared to 2022, in which revenue increased by 25% and gross margin grew by 37%. Its guidance for the full year 2024 is in line with results from 2023.
Over this past year, IMAX share price is down by 9%, but in the last month, it has grown 21% due to earnings that investors positively received, and the release of Dune 2 performed very well at the box office, becoming the largest movie debut so far this year.
IMAX has seen considerable overall profitability growth when comparing 2022 to 2023. IMAX offers a much more robust business model, experienced share price appreciation, and investor interest, unlike a similar theatre operator in AMC.
As of this writing, Noah Bolton 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 InvestorPlace.com Publishing Guidelines.
