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Tuesday, May 30, 2023

AMC Entertainment Holdings, Inc. (NYSE: AMC ) Just Reported Earnings, Analysts Cut Price Targets

The annual results are AMC Entertainment Holdings (NYSE ticker: AMC) was released last week, and now is a good time to revisit its performance. It’s a solid set of results; while revenue of $3.9b was in line with analysts’ forecasts, statutory losses were 18% less than expected, with AMC Entertainment Holdings posting a loss of $0.93 per share. Earnings are an important time for investors because they can track a company’s performance, check what analysts are forecasting for next year and see if sentiment on the company has changed. We thought it would be interesting for readers to see analysts’ latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for AMC Entertainment Holdings

NYSE: AMC Earnings and Revenue Growth March 2, 2023

Seven analysts covering AMC Entertainment Holdings now forecast 2023 revenue of $4.40 following the latest results. If realized, this would reflect a significant 12% increase in sales compared to the past 12 months. It is expected that the near-term loss per share will be significantly reduced, narrowing by 79% to US$0.40. Ahead of this earnings release, analysts had been modeling 2023 revenue of $4.52b and a loss per share of $0.42. It looks like sentiment has picked up slightly in the latest update, with analysts becoming more optimistic about their loss-per-share forecasts, despite the lower revenue numbers.

The consensus price target fell 20% to $2.39, and while losses are expected to be narrowed, lower revenue estimates clearly dampened sentiment. Still, there’s another way to think about price targets, and that’s by looking at the range of price targets put forward by analysts, since a wide range of estimates could indicate a different view of the likely outcome of the business. Currently, the most bullish analysts value AMC Entertainment Holdings at $4.50 per share, while the most bearish analysts price it at $0.50. With such a wide range of price targets, analysts are almost certain to bet on wildly different outcomes for the underlying business. Therefore, it might not be a good idea to base your decisions on consensus price targets, which are, after all, just the average of a broad range of estimates.

One of the ways we can understand these forecasts in light of the big picture now is to see how they measure up to past performance and industry growth estimate. One thing to tell from these estimates is that AMC Entertainment Holdings is expected to grow faster in the future than in the past, with revenue projected to grow at a 12% annualized rate by the end of 2023. If realized, this would be much better than the annual decline of 17% over the past five years. Compare this to analyst estimates for the broader industry, which suggest that (overall) industry revenue is projected to grow 8.6% annually. So it looks like AMC Entertainment Holdings is poised to grow faster than its competitors, at least for a while.

the bottom line

On top of that, analysts reaffirmed their estimates for next year’s loss per share. Sadly, they also lowered their revenue forecasts, but the latest forecasts still suggest that the business will grow faster than the industry as a whole. Still, EPS is more important to creating value for shareholders. Additionally, analysts lowered their price targets, suggesting the latest news has led to more pessimism about the business’s intrinsic value.

Along this line of thinking, we believe the long-term prospects of the business are more important than next year’s earnings.Here at Simply Wall St, we have a comprehensive analyst forecast for AMC Entertainment Holdings through 2025, and you can Check them out for free on our platform..

You still need to be aware of the risks eg – AMC Entertainment Holdings 4 warning signs (and 2 that didn’t quite suit us) We think you should know.

Valuation is complicated, but we’re helping make it simple.

Find out if AMC Entertainment Holdings is potentially overvalued or undervalued by reviewing our comprehensive analysis, which includes Fair value estimates, risks and caveats, dividends, insider trading and financial health.

View free analysis

This article by Simply Wall St is general in nature. We use only an unbiased methodology to provide reviews based on historical data and analyst forecasts, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any of the stocks mentioned.

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