Insights

Why Is Everyone Talking About AMC Stock?

AMC Entertainment Group (NYSE: AMC) gained widespread popularity for its part in the meme stock frenzy of 2021. That’s when a group of investors got together on social media forums, encouraging each other to buy AMC stock. 
The strategy worked to boost the share price by more than 2,000% at one point before it came crashing down as the scheme unraveled. Still, the stock remains popular, and many folks are still holding on in hopes of another surge higher.
More recently, the increased chatter around the company is its rapidly growing revenue. Blockbusters have returned to the big screen, helping AMC bounce back from pandemic-forced shutdowns. Let’s see what this could mean for the stock.
Image source: Getty Images.

Top Gun: Maverick brings folks to the movie theaters on Memorial Day weekend
Indeed, revenue in its most recent quarter (ended March 31) exploded to $785.7 million. That was up from $148.3 million in the same quarter last year. Of course, at this same time the previous year, people were more hesitant to leave their homes as vaccinations against COVID-19 were not as widespread. Still, the bounce-back goes a long way to assuage investor concerns that folks would not return to movie theaters after the outbreak.

AMC Revenue (Quarterly YoY Growth) data by YCharts
AMC makes considerable revenue from ticket sales, to be sure, but even more profitable are concession sales. In the quarter ended in March, it earned $252 million on food and beverage sales with a cost of goods sold of just $42.6 million. The highly profitable segment would not thrive unless people return to movie theaters where the company restricts people from bringing snacks inside.
Once on-premise, AMC can sell $9 buckets of popcorn and $6 cups of soda more easily. As the $252 million in sales proves, folks don’t mind paying the premium prices partly because enjoying popcorn is synonymous with the movie-going experience. Thankfully for shareholders, blockbuster films are bringing people back to the theaters. Management noted that, buoyed by the much-anticipated release of Top Gun: Maverick over the Memorial Day weekend, more than 5 million guests attended an AMC location, up from 2.6 million on the same weekend in 2021. 
Following the blockbuster weekend, CEO Adam Aron exclaimed:

We also want to thank the more than 3.3 million people who have already seen Top Gun: Maverick at our AMC and Odeon theatres in the U.S. and abroad. It was our pleasure to entertain you, and we invite you to come back to our theatres and see Top Gun: Maverick again. This movie is that good! And, lest we forget, expect to be dazzled by the so many more blockbuster movie titles that will be releasing in June, all summer long, and throughout calendar year 2022. Welcome back to the cinema, welcome back to the world of AMC!

AMC is progressing in its recovery

AMC Revenue (Annual) data by YCharts
AMC’s revenue cratered to $1.2 billion in 2020, down from $5.5 billion in 2019 due to forced shutdowns at the pandemic’s onset. It bounced back to $2.5 billion in 2021, but that was still roughly $3 billion below levels from before the pandemic. Shareholders can undoubtedly be pleased with the company’s recovery.
However, it would be prudent for investors to keep it in perspective and compare it to where the business was before the pandemic. Even if revenue doubles again in 2022 from 2021, it would not yet surpass 2019 sales.
Parkev Tatevosian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

AMC Entertainment Group (NYSE: AMC) gained widespread popularity for its part in the meme stock frenzy of 2021. That’s when a group of investors got together on social media forums, encouraging each other to buy AMC stock. 

The strategy worked to boost the share price by more than 2,000% at one point before it came crashing down as the scheme unraveled. Still, the stock remains popular, and many folks are still holding on in hopes of another surge higher.

More recently, the increased chatter around the company is its rapidly growing revenue. Blockbusters have returned to the big screen, helping AMC bounce back from pandemic-forced shutdowns. Let’s see what this could mean for the stock.

Image source: Getty Images.

Top Gun: Maverick brings folks to the movie theaters on Memorial Day weekend

Indeed, revenue in its most recent quarter (ended March 31) exploded to $785.7 million. That was up from $148.3 million in the same quarter last year. Of course, at this same time the previous year, people were more hesitant to leave their homes as vaccinations against COVID-19 were not as widespread. Still, the bounce-back goes a long way to assuage investor concerns that folks would not return to movie theaters after the outbreak.

AMC Revenue (Quarterly YoY Growth) data by YCharts

AMC makes considerable revenue from ticket sales, to be sure, but even more profitable are concession sales. In the quarter ended in March, it earned $252 million on food and beverage sales with a cost of goods sold of just $42.6 million. The highly profitable segment would not thrive unless people return to movie theaters where the company restricts people from bringing snacks inside.

Once on-premise, AMC can sell $9 buckets of popcorn and $6 cups of soda more easily. As the $252 million in sales proves, folks don’t mind paying the premium prices partly because enjoying popcorn is synonymous with the movie-going experience. Thankfully for shareholders, blockbuster films are bringing people back to the theaters. Management noted that, buoyed by the much-anticipated release of Top Gun: Maverick over the Memorial Day weekend, more than 5 million guests attended an AMC location, up from 2.6 million on the same weekend in 2021. 

Following the blockbuster weekend, CEO Adam Aron exclaimed:

We also want to thank the more than 3.3 million people who have already seen Top Gun: Maverick at our AMC and Odeon theatres in the U.S. and abroad. It was our pleasure to entertain you, and we invite you to come back to our theatres and see Top Gun: Maverick again. This movie is that good! And, lest we forget, expect to be dazzled by the so many more blockbuster movie titles that will be releasing in June, all summer long, and throughout calendar year 2022. Welcome back to the cinema, welcome back to the world of AMC!

AMC is progressing in its recovery

AMC Revenue (Annual) data by YCharts

AMC’s revenue cratered to $1.2 billion in 2020, down from $5.5 billion in 2019 due to forced shutdowns at the pandemic’s onset. It bounced back to $2.5 billion in 2021, but that was still roughly $3 billion below levels from before the pandemic. Shareholders can undoubtedly be pleased with the company’s recovery.

However, it would be prudent for investors to keep it in perspective and compare it to where the business was before the pandemic. Even if revenue doubles again in 2022 from 2021, it would not yet surpass 2019 sales.

Parkev Tatevosian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Free Share Allocation Reward Levels

STARTER

Class
$ 2,500 Deposit & Trade
  • REWARD^
  • 1 x Marathon Oil Corporation (NYSE:MRO)

ECONOMY

Basic
$ 5,000 Deposit & Trade
  • REWARD^
  • 1 x Pfizer Inc (NASDAQ:PFE)

ECONOMY

Standard
$ 10,000 Deposit & Trade
  • REWARD^
  • 1 x Amazon.com Inc (NASDAQ:AMZN)

ECONOMY

Plus
$ 25,000 Deposit & Trade
  • REWARD^
  • 2 x Apple Inc (NASDAQ:AAPL)
POPULAR

BUSINESS

Class
$ 50,000 Deposit & Trade
  • REWARD^
  • 4 x Apple Inc (NASDAQ:AAPL)

FIRST

Class
$ 150,000 Deposit & Trade
  • REWARD CHOICES^
  • 12 x Apple Inc (NASDAQ:AAPL)
  • 2 x Tesla (NASDAQ:TSLA)
^Please refer to the Free Share Promotion Terms and Conditions for details.

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here To Get Started
FREE AAPL, TSLA, AMZN, PFE or MRO Share(s)
REGISTER TO BE ELIGIBLE FOR FREE SHARES
TRAVEL ACROSS THE FINANCIAL WORLD
Act Fast - Promotion Ends In
Click Here For More Info