TipRanks
4 min read
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AMC Entertainment (AMC) just posted its best Memorial Day weekend ever, setting new records for both ticket sales and concession revenue. But despite packed theaters and positive box office momentum, the stock has dropped more than 16% over the past week. The disconnect highlights a deeper issue: while strong movie turnout is encouraging, it’s not enough to offset the company’s underlying financial challenges. With lingering structural issues, ongoing meme-driven volatility, and more attractive opportunities elsewhere in the sector, I remain bearish on AMC for now.
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There’s no denying that AMC is enjoying some genuine momentum. The Memorial Day weekend was a clear highlight, as more than 7 million people went to an AMC to catch a movie (or two) over the holiday. This helped the company set new records for admissions, food and beverage sales, and overall revenue.
Furthermore, the industry is experiencing upward trends. After a brutal start to 2025, the spring months brought a welcome turnaround. April’s box office results were double what they were the previous year, suggesting that audiences are returning to theaters (finally).
AMC is looking to ride the wave of returning moviegoers by doubling down on offering “premium experiences”, including upgraded seating, enhanced sound systems, and larger screens. These premium formats command higher ticket prices, which should help boost revenue per customer.
Finally, the company has recently announced it is experimenting with new advertising strategies, potentially creating another revenue stream.
Despite riding a rising tide and operational improvements, AMC’s financial health remains problematic. The first quarter of 2025 was particularly challenging, with several key metrics heading in the wrong direction.
Revenue dropped by 6.7% year-over-year, falling to $862.5 million. Furthermore, AMC reported a loss of $202.1 million for the quarter, compared to a loss of $163.5 million during the same period in 2024. The impact this has had on AMC’s cash reserves is alarming. Cash levels have dropped dramatically from $632.3 million to just $378.7 million. This rapid cash burn is worrying.
Ultimately, AMC’s debt is a significant burden. The company carries a staggering $8.28 billion in total debt, with $43 million in debt payments due this year, $173 million next year, and a whopping $526 million in 2027. With less than $400 million in cash, its interest coverage ratio is now an anemic -0.18.
