AMC Entertainment caught the attention of retail investors earlier this year when it because a meme stock and increased from a low of right under $2 a share in Jan. to a high of around $72 a share in May. At its price right now in the low $30s a-share range, it has decreased by almost 60% from its high. However, since it still sells for 16 times higher than its Jan. low, one might wonder if it holds the potential for a new boost. Could this movie theater stock help some of its investors become millionaires by 2030? Let’s find out.
The state and numbers of AMC Entertainment
AMC had unprecedented pain in 2020 as the pandemic forced closures. To get through it all, the company had a massive share issuance. At the end of June, shares outstanding stood higher than 104 million. Today, they have 513 million shares on the market.
The pandemic continued to have lingering harm on revenue for the two starting quarters of this year. AMC’s revenue for this came in around $593 million, lower by 38% compared with the initial six months of 2020. Nonetheless, with 62% less operating costs during this period, the company lowered its net loss by two-thirds during this time to $911 million.
The company also reported a record $2 billion for liquidity. While its corporate loans of $5.5 billion are still a burden, they have gone down from $5.7 billion at the end of last year as the previously mentioned stock issuances aided the company in staying afloat.
Management also reported that Q2 attendance was at 23% of 2019 levels. However, while the firm did not give specific predictions, admission revenue reached 57% in Q3, up from 18% in the second quarter. Also, the company forecasts better theater-level cash flow by the fourth quarter.
Will AMC lead you to millions?
With enough momentum, no one can say that $200 per share or even $2,000 a share is impossible for AMC.
However, the lingering affects of the shutdowns make getting to such share levels very improbable. And even though AMC is recovering, their recovery does not mean guaranteed prosperity. Given the lack of a clear path to sustainable growth, investors should not think that help from AMC in their quest for $1 million, and taking the numbers out to 2030 will likely not help make this entertainment stock a millionaire maker.
Author: Blake Ambrose