2 Ways AMC Can Bounce Back After Its Crash.
$AMC Entertainment(AMC.US$ has fallen out of favor with investors. The company was part of the meme stock frenzy of 2021, which saw it garner mass popularity among retail investors.
The stock has fizzled without their continued buying, falling 80% off its high. That said, AMC has an opportunity to bounce back if it can return to profitability and use the proceeds to pay down debt. Here are two steps for a rebound:
1. Stemming the losses on the bottom line
In its most recent quarter, which ended March 31, AMC reported $337 million in losses on the bottom line. That was despite revenue rising more than fivefold from the same quarter in the prior year, when -- through no fault of its own -- it was forced to shut down all its theaters temporarily due to the COVID-19 outbreak. It was a devastation it is still trying to recover from.
2. Paying down long-term debt
AMC's second goal relies on accomplishing the first one. If it can start generating profits, then the first thing it should consider is paying down long-term debt. It holds $5.5 billion in long-term debt that is expensive to service. In the trailing 12 months, AMC paid $387.7 million in interest expenses.
In its most recent quarter, which ended March 31, AMC reported $337 million in losses on the bottom line. That was despite revenue rising more than fivefold from the same quarter in the prior year, when -- through no fault of its own -- it was forced to shut down all its theaters temporarily due to the COVID-19 outbreak. It was a devastation it is still trying to recover from.
2. Paying down long-term debt
AMC's second goal relies on accomplishing the first one. If it can start generating profits, then the first thing it should consider is paying down long-term debt. It holds $5.5 billion in long-term debt that is expensive to service. In the trailing 12 months, AMC paid $387.7 million in interest expenses.
Admittedly, this will not be easy for AMC to accomplish. Revenue fell from $5.47 billion in 2019 to $1.24 billion in 2020, bouncing back only to $2.53 billion in 2021. It needs to double revenue again to reach 2019 levels -- a year in which it generated a loss per share of $1.44 anyway.
But if it achieves the two goals set out above, the stock could bounce higher.
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71262399 : "fizzled without continued buying?" are you not aware of the "Apes" buying fiercely throughout the past 18 months.
you can throw all the technical analysis at it but the short interest and 100% utilization for months you can tell this isn't a stock people are buying for technical reasons.
InsiderJesus : You obviously haven’t read this report https://financialservices.house.gov/uploadedfiles/6.22_hfsc_gs.report_hmsmeetbp.irm.nlrf.pdf