AMC Stock Price May Further Decrease Amidst Negative Outlook

Fundamental Analysis

AMC Entertainment Holdings, Inc., a NYSE-listed company, exhibited a downward trend in its stock price on September 08, 2023, where it closed at \$7.18, which is an 11.58% decrease from the previous trading day. This decline also made the company's market capitalization stand at \$1.14 billion.

On a yearly scale, the company's shares reached their highest at \$107.5 and plunged to the lowest at \$7.1, the latter being in parallel with the last closure. The company had an average trading volume of approximately 9.38 million shares, and on the last trading day, up to 31.77 million shares were traded.

From the earnings perspective, AMC reported a negative earnings per share (EPS) of \$-5.99. Consequently, the price-to-earnings (PE) ratio is negative at -1.2, which is unwelcome news for potential investors given that a lower EPS and PE ratio may equate to a riskier investment.

The recent news regarding the company gives some insight into the decreasing price trend. One key detail is the company's plan for a stock offering for 40 million shares, which could have led to a drop in the share price due to potential stock dilution.

Technical Analysis

The company's 50-day moving average is \$37.48, and the 200-day moving average is \$49.29, both significantly higher than the current price. The relative strength index (RSI) is extremely low at 7, suggesting the stock may be undervalued, potentially due to recent selling pressure.

The moving average convergence divergence (MACD) of \$-14.24 indicates a negative trend for the stock. Conversely, the 3-month average true range (ATR) of \$47.46 is a sign of higher volatility for the stock. However, in this instance, since the ATR is more than six times the last closing price of \$7.18, it is evidence of very large price swings.

There's no strong support level as the stock is at its yearly low, while the resistance level for the stock is \$8.12, considerably higher than the closing price.

From analyst expectations, the target high, low and median for AMC remains at \$19, conveying that analysts foresee a potential upside for the price. However, the consensus is "sell", aligning with the reported fundamentals and recent stock performance.

Stock Price Prediction

Predicting the stock price is a complex process with numerous external factors at play. However, considering the historical price, financials, technical indicators and recent news about the company, the stock price for AMC can potentially further decrease in the short term. Given the current momentum and the lack of a strong upward catalyst, it could potentially hover around its current price of \$7.18 on the next trading date, September 11, 2023.

For the upcoming week, considering the substantial trading volume and high volatility, as well as the negative news about the company’s financial outlook, the stock could follow a downward trend unless a significant positive trigger arises.

Evaluation

Given the fundamentals, technicals and recent news, AMC Entertainment Holdings, Inc. is currently rated as a 'Sell.' Despite low RSI indicating oversold status, the negatives such as the falling price trend, negative EPS, the negative PE ratio and the recent plan for a stock dilution imply a potentially high-risk investment. There are a few considerable bearish indicators like the negative MACD and high ATR, which are all pivotal warnings for short-term investors.