The largest film operator in the world, AMC Entertainment (AMC), finally makes a return? Since he was struck by the pandemic, AMC has struggled to remain afloat. The low demand for the box office, a heavy debt burden and a massive dilution of shareholders to increase immediate species have maintained AMC shares in a difficult situation in the last three and a half years, especially after being a favorite retail investors.
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While AMC slowly improves its fundamental principles and see a rebound in national box office numbers, it still needs more money to remain liquid. With the sharing dilution on the horizon, I prefer to take a step back and put a maintaining note on the action.
AMC Entertainment (AMC) Prix History in the past 3 years
Although the AMC will benefit from a larger number of box office tickets in 2025, the return of the company is always a work in progress. A more in -depth examination of his latest developments suggests a mixed image for 2025, with a Call for winning winnings at the end of this month Unlikely to stimulate the feeling of investors.
For those who do not know AMC, the cinema chain has become one of the main actions of memes during the frenzy of retail investors in 2021. The title attracted the attention of many investors and retail traders due to His high short interest and the possibility of bankruptcy caused by the serious impact that Covid-19 had on his core business. Although the market value of AMC today is just over $ 1.26 billion, it was worth $ 28.44 billion in mid-June 2021.
To give you an idea of the way AMC affairs were struggling, its revenues went from $ 5.02 billion in 2019 to only $ 1.07 billion in 2020, and it did not rebound at pre-pale levels since. But despite the drought of demand, the real problem is that AMC had used strongly in 2019, just before the pandemic blow, with $ 10 billion in net debt – should not be $ 5 billion in 2018.
AMC Entertainment (AMC) Gaining and Revenue History dating from 2018
Without doubt, CEO Adam Aron and the management team have done what any activity in difficulty would do when its stock market price would increase: sell equity. The AMC collected around $ 2 billion between 2020 and 2021 to market offers, which diluted shareholders but enabled AMC to reimburse $ 1.8 billion in debt between 2021 and 2022. While The course of action remained volatile and continued to attract retail investors, AMC made SMAR movements to increase more funds, such as the issue of convertible privileged actions. This has made it possible to raise an additional $ 832.7 million in 2023 and $ 583.3 million in the past twelve months.
In simple terms, since the end of 2022, AMC shareholders have been diluted by 71% heartbreaking.
Although it is always at the limit of liquidity with a quick ratio of only 0.4x (which means that the AMC has only 40 hundred liquid assets for each dollar of current liabilities), the company reaches to stay afloat. Even if the dilution caused the fall of the stock of approximately 98% of its peak, the management team succeeded in something almost impossible: preventing AMC from depositing chapter 11.
Graphic showing AMC Entertainment (AMC) of debt in the history of active ingredients dating from 2018
To be clear, if it was not for nearly $ 3.5 billion lifted by capital issuing in the past five years, driven by the high popularity of its shares (thanks to investors in shares even ), AMC would most likely be bankrupt.
The fundamental principles of the company are still in slow recovery mode. For example, the company’s EBITDA has been positive since 2022, from a billion negative dollars in 2020 to 397 million positive dollars in FY2023. The revenues of 2023 ended at 4.36 billion dollars, still around 87% of pre-pale levels. The bad news is that the recovery lost the momentum in 2024.
Graph showing AMC Entertainment (AMC) Historic income from Q4 2022
The national box office in 2024, with 8.57 billion dollars, decreased by around 4% compared to 2023, mainly due to a series of opposite winds, including the strike by Hollywood actors and directors , which delayed the releases of films. In this context, AMC revenues in the past twelve months amounted to $ 4 billion – lower than that of 2023.
But the situation as a whole is that the company is still in difficulty, largely because of its massive debt office. AMC is currently $ 7.9 billion in net debt, which has resulted in net expenses of $ 368.2 million in the past year. To give you an idea of how this weighs on the profitability of the company, out of the $ 399 million reported in net losses in the past year, 97% of these losses are due to interest on debt.
As AMC is not yet out of the woods, the company must convince investors of a successful turnaround. In addition to renegotiating its debts, the cinema chain must increase funds to reduce its debt because AMC uses more debts than equity to finance its operations or investments, long -term debt representing 115% of its capital.
To move forward, the company has two unstable options: (1) Increase more equity, risk continuing the shareholders’ dilution and exerting pressure on the course of its shares, or (2) hope a strong rebound in The results of the box office to return to pandemic levels.
On the second option, the CEO of AMC, Adam Aron, is optimistic around 2025, but said that he expects the big blockbusters, even if the small studios produce more films. In fact, the performance of the fourth quarter box office has been better than expected, subsequently helped Moana And the fantastic musical film Wickedwhich pushed the cumulative crude AMC up 26% from one year to the next.
Since the 2025 box office will probably face softer comparisons due to Hollywood strikes affecting 2024 Productions, I think it is reasonable to expect an increase of 5% to 7% compared to the $ 8.57 billion in 2024.
For the future, AMC is ready to Report your earnings on February 25 after the closing bell. The company should display a loss per share of 17 cents, with revenues of approximately $ 1.29 billion, reflecting an annual increase of 17%. For 2024, total income should reach $ 4.62 billion, down 4% in annual shift.
PROVISIONS OF AMC Entertainment (AMC) profits before the call to come on February 25, 2025
Although the interior box office numbers better than expected in the fourth quarter can surprise investors and increase the numbers of the Fourth Trimester of the AMC, I think that investors are more inclined to consider the prospects for the 2010 financial year, because This could finally be the year when AMC income exceeds pre-pale levels.
In addition, the situation of AMC’s debt will be crucial in the future, and many will depend on how the management team tries to repay the gigantic debt of the company. In the third quarter, AMC announced an extension of $ 2.4 billion in long -term debt. Since the interests of debt at the current levels can become unbearable, I expect AMC to continue to repay its debt and issue more equity throughout 2025. This could be essential for a successful reversal , but he will probably continue to exert downward pressure on the course of AMC’s action.
Given the current AMC situation, it is not surprising that Wall Street’s consensus is not exactly optimistic, but it is not ultra negative either. In the past three months, the four analysts covering the stock assessed AMC in calendar. The average AMC price target is $ 3.63 per shareThis suggests an increase of 6% of the current price.
AMC Entertainment (AMC) action forecasts for the next 12 months, including an average, average and low price objective
AMC Entertainment has survived thanks to the support of investors in even shares and increases in strategic capital, but its recovery remains slow. With major debts and current liquidity challenges, the company faces difficult decisions – potentially more in -depth of the shareholders’ dilution or relying on a box office resurgence.
Although the results of the fourth quarter have exceeded expectations, the prospects of 2025 seem both promising and uncertain. Like most Wall Street analysts, I remain cautious, staying on the sidelines rather than lowering the largest American cinema chain.
