AMC Entertainment (NYSE:AMC) reported better than expected earnings after the close of Monday, with the stock trading up over 5% after hours. In this article, we'll look at a few highlights from the quarter and use machine learning to analyze the stock.
Q2 Highlights
- Estimates: Analysts estimated that AMC would lose 91 cents per share for the quarter and expected revenue of $382.1 million
- Results: AMC lost 71 cents per share and revenue came in at 444.7 million for the quarter. The company lost 561 million, or $5.38 per share, in Q2 last year
The CEO of AMC, Adam Aron, stated this was a "transformational quarter" for fundraising as they sold $1.24 billion of shares of the meme stock, boosting its liquidity above 2 billion.
We believe this gives AMC financial staying power to navigate boldly amidst coronavirus waters
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Theatres Reopening Boosted Q2 Earnings
As the economy reopened and people returned to movie theatres, new releases like “Fast 9” improved revenues for the quarter. As the CEO stated:
We would like to think that someday when a movie is filmed about AMC and COVID, its title will be one compelling word, ‘Recovery.’ But only time will tell.
As Nasdaq highlights, the company has been focused on resuming operations to full capacity and had opened roughly 589 of 593 domestic sites and 110 of 357 overseas locations as of April 30, 2021.
The company also stated they will be accepted Bitcoin payments by the end of the year.
AMC: Machine Learning-Based Estimates
In terms of social sentiment, the company currently has an 84% positive sentiment based on data from StockTwits:
Below, let's look at how several ML-based ranking scores the stock at current levels:
- K Score of 9: K Score is a predictive equity ranking score between 0 and 9 with a high score indicating a higher probability of outperformance over the next month.
- Quality Score of 3: The Quality Score is indicative of how well-managed a company is how strong the financial health of the company is.
- Growth Score of 1: The Growth Score is indicative of a company's growth and related growth factors. These factors include but are not limited to ROA/ROE, YoY growth rate, and more.
- Value Score of 1: Value score indicates whether a stock is overpriced or underpriced at current levels.
- Momentum Score of 1: The momentum score measures the rate at which a company's price or volume is accelerating.
Overall, we can see these ranking scores are not very bullish on the company's quality or fundamentals, but still has an outperformance indicator (K Score) over the next month that is very bullish.
AMC is currently up over 600% in the past year, although it's down over 50% from its all-time high in June.
Given that roughly 15.95% of the float is short, as of Jul 15, 2021—and that it's a meme stock—AMC could be setting up for a much larger squeeze this week.
If you want to see more ML-based estimates for AMC, you can sign up for a free account of the MLQ app here.
