AMC Earnings Preview: Crucial Q3 Results Could Signal Shift From Meme Frenzy To Mainstream

AMC Entertainment Holdings Inc. AMC is scheduled to release its third-quarter financial results after the closing bell on Wednesday. This event is highly anticipated given the significant challenges the company’s stock has faced in recent months.

As the largest cinema chain globally, AMC has witnessed its stock price plummet by more than 70% since the beginning of the year, following a substantial 75% decline in 2022, primarily attributed to the bursting of the meme stock bubble.

Once a darling among retail traders and a favorite meme stock championed by Reddit’s WallStreetBets community, AMC has undergone a significant transformation in investor sentiment over the past year. Today, there is a unanimous absence of ‘Buy’ ratings from Wall Street analysts who cover the company, underscoring the prevailing sense of pessimism surrounding AMC’s future prospects.

This change in sentiment may be attributed to various factors, including the challenges posed by the COVID-19 pandemic, shifts in the entertainment industry, and concerns about the sustainability of the company’s business model.

Traders will be closely monitoring AMC’s third-quarter results to gauge the company’s ability to navigate the ongoing challenges in the cinema industry and to assess any signs of recovery or stabilization in its financial performance.

So, what are the expectations for AMC’s Q3 earnings?

AMC Q3 Earnings: What Is The Street Expecting?

The median consensus among Wall Street analysts currently projects a negative earnings-per-share (EPS) of approximately 25 cents for the third quarter.

The lowest estimate is a loss of 32 cents per share, while the most optimistic projection is a loss of 21 cents. In the previous quarter, Q2 2023, AMC surpassed earnings expectations, reporting an EPS of eight cents, compared to an expected loss of 36 cents per share.

Despite the negative figure, this would represent a notable improvement of approximately 85% compared to the same quarter last year, when AMC reported a negative EPS of -$1.76.

Revenue estimates for the third quarter are currently positioned at $1.26 billion, reflecting a 30% increase from the $1.01 billion reported in Q3 2022.

The most bullish revenue estimate for Q3 is $1.35 billion, while the most pessimistic estimate stands at $1.05 billion.

In the previous quarter, Q2 2023, AMC slightly outperformed revenue forecasts, reporting $1.348 billion compared to the expected $1.287 billion.

AMC Stock Reaction To Prior Earnings Reports

Fiscal Period	Report Date	Est Avg EPS	Actual EPS	Est Avg Sales	Actual Sales	1-Day Price Reaction (%)
2Q 2023	08-08-2023	$-0.37	$0.09	$1.29B	$1.35B	-0.69%
1Q 2023	05-05-2023	$-1.57	$-1.50	$938.20M	$954.40M	-3.83%
4Q 2022	02-28-2023	$-1.92	$-1.24	$977.66M	$990.90M	-8.07%

Wedbush Focuses On Q4 Guidance

According to a note reported by MT Newswires, Wedbush Securities anticipates that AMC Entertainment is on track to deliver robust results for the third quarter.

The company is expected to achieve a significant recovery in earnings before interest, taxes, depreciation, and amortization (EBITDA), bringing it back to pre-pandemic levels, aided by effective cost management efforts.

According to Wedbush, AMC could potentially share a positive outlook about its performance in the fourth quarter.

AMC’s optimism for positive Q4 results is tied to its distribution of Taylor Swift’s ‘Eras Tour Concert’ movie, which premiered in AMC Theaters on Oct. 13, and the anticipation of Beyoncé’s upcoming concert movie release.

Wedbush reaffirmed a neutral rating for AMC and reduced the stock-price target from $19 to $11.

The 12-month average target among Wall Street’s analysts covering AMC is $9.15, or 11% lower than current market prices.

Read now: What’s Going On With AMC Entertainment Stock?

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