Sign InSummary
AMC Entertainment Holdings, Inc. (AMC) stock closed higher on November 3, 2023, but the technical and fundamental analysis suggest caution and a Hold recommendation due to negative EPS, high debt-to-equity ratios, and uncertainties regarding the company's financial health.
Technical Analysis
AMC Entertainment Holdings, Inc. (NYSE: AMC) closed at $10.72 on November 03, 2023, an increase of $0.23 or 2.19% from the last trading day. The high and low of the day were $11.30 and $10.53 respectively. The insider trading activities stock had seen an average daily volume of around 20.72 million shares. On the day, the volume was recorded as 22.47 million shares.
The stock has a 50-day moving average of $9.40 and a 200-day moving average of $39.68. These averages give a bullish near-term trend indication but a bearish long-term trend indication. Its Relative Strength Index (RSI14) of 64 signals the stock is neither overbought nor oversold.
The Average True Range (ATR), a measure of stock volatility was at 8.48 will the MACD, a momentum oscillator for trend following and measuring momentum, is at 0.48 indicating a bullish pattern. The stock has a significant level of support at $8.62 and resistance at $11.00.
Fundamental Analysis
The market cap of AMC Entertainment Holdings, Inc (AMC) is $2.13 billion with around 198.36 million shares outstanding. The company's debt-to-equity ratio has raised concerns among market watchers, and late payments could potentially be financial warnings signs according to a risk management company - Creditsafe.
AMC has an Earnings per Share (EPS) of -$5.74 and a Price to Earnings ratio (PE) of -1.87. The negative EPS and PE indicates the company currently has more losses than earnings. The company next Earnings Announcement is on the 11/08/2023.
The discounted cash flow (DCF) is $11.32, which provides an intrinsic value of the stock, with the current price being lower, it indicates a potential undervaluation.
The projected target high, low, consensus and median price by market analysts is $19. However, the consensus rating is 'Sell' with 3 analysts recommending 'Sell', 2 recommending 'Hold' and only 1 each recommending 'Strong Buy' and 'Buy'. These ratings go to show that analysts are not overly optimistic about the stock's performance.
News Analysis
Relevant news about the company indicates a mixed outlook. The Taylor Swift's Eras Tour film, which AMC screened, garnered impressive box office receipts, showing a $150 million domestic collection. This could be a potential boost to the company's bottom line.
However, warnings about AMC's debt-to-equity and late payments could potentially indicate some financial instability. Plus, there are predictions that now may not be the best time to invest in AMC stock due to its many challenges in the post-pandemic era.
Stock Prediction
Based on the technical indicators and recent company news, it's tough to predict a significant upward movement for AMC's stock in the next trading day and upcoming week. The next key catalyst could be the earnings announcement due on November 8, 2023.
Evaluation
In light of the detailed analysis, it is recommended to categorize AMC Entertainment Holdings, Inc. (AMC) stock as a 'Hold'. The company appears to be undervalued going by the discounted cash flow result. However, given the negative EPS, high debt-to-equity ratios, and uncertainties surrounding its financial health, caution is advised. It appears more prudent to hold and observe the company's next earnings announcement before making an investment decision.
