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Should I Buy AMC Stock Following A Positive Q2 Earnings Report?

Global cinema chain AMC revealed narrowing losses and soaring revenue at its Q2 earnings call yesterday, as well as a fresh Warner Bros deal

It seems like everything that can be said about AMC (NYSE: AMC) this year has already been said — other than anything remotely related to its core offering: movies. 

Luckily, the cinema chain-cum-meme stock extraordinaire is back(ish) with somewhat solid earnings and a Warner Bros. deal.

What does this mean for AMC?

Coming in 2022, AMC Entertainment will have the right to showcase every single Warner Bros. film in theaters for a full 45 days before they go on-demand (streaming). 

“It’s a cinema chain, what’s the big deal with showing movies?” I hear you mutter incredulously. 

Well, in case you haven’t noticed, theaters have had a bad time of it, even with restrictions lifting. Most studios, including Warner Bros., Universal, Disney, etc. have been releasing streaming exclusives or releasing in both theaters and on streaming platforms simultaneously. In doing so, it offers consumers the option to stay at home instead of paying to go to the cinema and beef up their profit margins with some outrageously overpriced popcorn. 

So you see, a bit of an issue for theaters, hence why this new deal is great for AMC, as it guarantees 45 days of unfettered cinema exclusiveness. 

What’s more, Q2 earnings weren’t too shabby either:

  • Revenue climbed to $444 million, up from $19 million last year — still a ‘tad’ shy of 2019’s $1.5 billion haul in Q2, but let’s not talk about that. 
  • Its net losses narrowed to $344 million, or $0.71 per share, way down from last year’s $5.36 per share. 
  • Its soaring stock price has helped it to raise another $1.25 billion in capital, boosting liquidity to $2 billion. A nice little rainy day fund. 

However, it’s important to bear in mind that AMC is still very much subject to short-squeeze-related volatility after becoming a WallStreetBets favorite on Reddit earlier this year — don’t pretend you don’t know what this means. 

It’s still very much a risky investment, but this Warner Bros. deal for 2022 gives hope that a return to pre-pandemic profits could take place as early as next year.

So how exactly do you figure out hot air from real potential? Check out MyWallSt’s full list of high-growth stocks (including one or two meme stocks mentioned above) by starting your free trial now.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here