Will AMC Stock Skyrocket Post-August 11? Here’s What Traders Need to Know

AMC's make-or-break moment lands in 4 days—will meme stock mania reignite or collapse like a poorly margined crypto exchange?

The setup: Retail traders are circling like sharks around bloodied shorts, but Wall Street's algos couldn't care less about your diamond hands.

Key levels: Watch the $6.20 support like a hawk—break that and even the most delusional ape will start sweating.

Reality check: Remember kids, 'fundamentals' are just boomer talk until your Robinhood notifications turn crimson.

We come to this place for magic

Revenue growth should be positive after clocking in with top-line declines in four of the last five quarters. After a rough slate of theatrical releases through the first three months of this year, studios finally connected with audiences in the second quarter.

The sloppy first quarter for exhibitors ended with domestic box office receipts sliding 12% from last year's haul and 17% below where they were two years ago. The quarter that AMC will be discussing next week was far more bullish. Industry ticket sales in the U.S. soared 37%, according to Box Office Mojo -- fueled by the success of A Minecraft Movie, the Lilo & Stich live-action reboot, and Sinners. It was in line with 2023's blowout showing.

AMC itself saw its revenue decline 9% in the first quarter, better than the 12% decline in the revenue that exhibitors generated in ticket sales. This makes sense.

AMC has been stepping up its game on the concessions front that isn't covered by box office reports. It's been ramping up its offerings, including premium-priced collectibles tied to specific tentpole releases. Its net loss and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) deficit widened in the first quarter, but as a scalable business, the opposite should be happening in its second-quarter performance.

Analysts seem to be aiming too low heading into the Aug. 11 report. They see a net loss of $0.08 a share, a significant improvement from the $0.43 a share deficit it produced a year earlier. Can AMC fare even better? Can it produce a quarterly profit, something that it has only done twice in the last six years?

The only time that AMC was profitable since the summer of 2019 was in the second and third quarter of 2023. We already know that industry ticket sales were in line with what was generated for the same three months two years ago.

A profitable second quarter WOULD turn heads. Beating analyst revenue targets should be even easier. I know a 30% year-over-year increase in revenue sounds impressive for an out-of-favor investment, but how can analysts be aiming that low when overall domestic box office receipts climbed 37%?

It's unlikely that AMC is either losing share or falling short at the concessions counter. I would be shocked if AMC doesn't beat on revenue. An actual profit for the quarter would be the cherry on top of the hot buttered popcorn sundae.

Image source: Getty Images.

Somehow, heartbreak feels good in a place like this

It's been a bumpy road for AMC, and even a few blockbusters in recent months haven't been enough to turn bearish sentiment around. Rich Greenfield at LightShed Partners rightfully points out that audiences have yet to truly return after the pandemic. Revenue for multiplex operators is still below 2019 levels, and that is with ticket prices across the leading chains up roughly 30% in that time.

This isn't a problem. Theme park operators are posting record revenue and operating income despite entertaining fewer guests than they did six summers ago. They are also getting folks to pay more to get through their turnstiles and doing a better job of monetizing the experience once customers get inside.

This transformation -- for both theater chains and operators of other gated attractions -- should be applauded. The rules of engagement have changed, and they are winning.

AMC has had its blunders. Most of the blame for the stock's dramatic fall from its 2021 peak is self-inflicted, outside of the frenzied rally that inflated the shares in the first place. AMC's own fingerprints are all over the reckless dilution at inopportune times.

It's a different world now. The future is brighter than the projectors for movie theater stocks. Rival(CNK -0.74%) has been profitable since 2023, and it's now even paying a quarterly dividend.

It's in AMC's control to turn the market bullish next week. It will probably never be able to reverse its bloated share count, but long-term debt is shrinking for the fifth year in a row. The headwinds are there heading into Monday afternoon's report.

The revenue beat should be a lay-up. A profitable quarter is the trick shot, but if it can hit nothing but net -- and stay there -- this will be a whole new world for AMC, its shareholders, and Kidman's lonely walk into a barren movie theater.