The management team at AMC Entertainment Holdings Inc. (NYSE: AMC) has made several attempts to revive some of the events that took place during 2021. In a period of financial history that will now be referred to as the “meme stock mania,” shares of AMC and other previously disregarded companies soared by enough percentage points to make a select few bold traders significantly wealthier overnight.
[content-module:CompanyOverview|NYSE: AMC]However, the price in AMC and these other meme stocks retraced significantly right after the speculative bubble burst, as fundamentals eventually matter for valuations and where a stock might begin to trade in the upcoming months and quarters. With this in mind, the company just reported its latest quarterly earnings results for 2025, a much-awaited release for several reasons.
The first reason is that management had floated the idea of buying Bitcoin as an added asset to the company’s balance sheet, which could consequently be worth a lot more in the future should the price of the cryptocurrency benchmark rise, as it has recently. However, even if these plans were to be carried out, the fundamental figures in the quarterly release suggest that investors should be careful around these selling points.
Price Action: The First Indication for AMC Stock
Over the past six months, shares of AMC have declined by as much as 36.8%, significantly underperforming the broader S&P 500 and any other entertainment stocks or retail stocks that can compare to the exposure to consumer cyclicality that AMC goes through.
Some stocks occasionally see this sort of bearish price action but still hold up a reasonably solid fundamental proposition for investors to consider and become even more attracted by the price discounts. However, this is likely not the case for AMC stock, as the bearish price action can be justified in a multitude of ways today.
Financial Breakdown in AMC’s Quarter
So, what exactly drives revenue and earnings at a company like AMC? Movie theaters are brick-and-mortar businesses that rely entirely on foot traffic and show attendance, and AMC didn’t get off to a great start regarding the latest quarterly earnings press release.
Attendance reached 41.9 million for the first quarter of 2025, a significant decline of up to 10.1% from the recorded attendance during the same quarter last year. This speaks volumes about the consumers' budget-consciousness and the movie theater's loss of place as a preferred experience in today’s economy.
[content-module:Forecast|NYSE: AMC]These headwinds translated into a net revenue decline of 9.3% for the year, which couldn’t even be offset by charging a premium for snacks or other ancillary items associated with the typical movie theater experience. This shows that the brand and business model are losing pricing power and market share in real time.
The company recorded a net loss of $202.1 million for the first quarter of 2025, which widened from the same quarter last year and its net loss of $163.5 million. No matter how management attempts to sell a recovery or rebound, investors must acknowledge that they are facing a very complex and challenging financial situation with AMC.
The worst thing to keep in mind for AMC’s financial makeup is just how the business is able to keep the lights on despite reporting quarter after quarter of deepening losses. When looking to the cash flow statement, investors can note that up to $158 million were received by issuing more stock into the market.
In other words, current shareholders are being diluted aggressively, often just so that AMC can continue operating a losing business model and financial structure, effectively subsidizing the movie theater business. Unless charity is a goal to be achieved in a portfolio, AMC’s future should be avoided.
The Market Agrees, No Charity Here
Knowing that this hole keeps digging deeper, analysts at Citigroup decided to reiterate their Sell rating on AMC stock as of late April 2024. This time, they also lowered their valuations from $2.80 per share to $2.30 per share, which calls for as much downside as 15.5% from where the stock trades today.
That’s not even considering the recent quarterly earnings, which might influence these analysts to take an even harsher view of the company. Of course, some might say that the worst may already be priced into the stock at these low prices, but that’s far from the truth.
Short sellers boosted their positions over the past month, enough to bring the company’s short interest higher by 20.6% in a vote of no confidence on management’s ability to turn things around internally, and that is something investors should keep in mind next time they hear dreams of adding Bitcoin or other obscure strategies to help the stock’s price.
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