Citi analyst Jason Bazinet has adjusted the price target for AMC Entertainment (AMC, Financial), reducing it from $2.80 to $2.30 and maintaining a Sell rating on the company's stock. This revision comes as the firm reassesses AMC's performance and future outlook in light of the first-quarter results for the U.S. domestic box office.
The updated price target reflects recent assessments and expectations regarding the cinema chain's business environment and financial performance. As AMC navigates the evolving landscape of the entertainment industry, the revised target highlights the challenges the company faces in boosting its market position and profitability.
AMC Key Business Developments
Release Date: February 25, 2025
- Revenue: Increased by 18.3% year-over-year to $1.3 billion in Q4 2024.
- Adjusted EBITDA: Rose to $164.8 million, more than triple the previous year's Q4 figure.
- Cash from Operating Activities: Generated $203.6 million in Q4 2024.
- Free Cash Flow: Achieved $113.9 million in Q4 2024.
- Attendance: 62.4 million guests in Q4 2024, a 20% increase from Q4 2023.
- Food and Beverage Revenue per Patron: Reached a record $7.15 in Q4 2024.
- Admissions Revenue per Patron: $11.56 in Q4 2024, the second highest for a fourth quarter.
- Net CapEx: $83.9 million in Q4 2024, totaling $213.7 million for the full year.
- Theater Footprint: Net reduction of 130 locations since December 31, 2019.
- Debt Reduction: Reduced principal balance of debt and finance leases by $375.9 million in 2024.
- Cash and Cash Equivalents: $632.3 million at the end of Q4 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AMC Entertainment Holdings Inc (AMC, Financial) reported a significant increase in revenue, up 18% year over year for the fourth quarter of 2024.
- The company achieved a post-pandemic record for adjusted EBITDA, which more than tripled to $164.8 million compared to the previous year.
- AMC generated over $200 million in cash from operating activities and $114 million in free cash flow, marking the highest quarterly cash flow post-pandemic.
- Attendance at AMC theaters worldwide increased by 20% in the fourth quarter of 2024, with over 62 million guests visiting.
- AMC achieved all-time records for food and beverage revenue per patron, driven by innovative offerings and enhanced guest experiences.
Negative Points
- Despite improvements, AMC's domestic industry-wide movie theater attendance remains down nearly 40% from pre-pandemic levels.
- The company continues to face challenges with the timing of film releases and audience attendance patterns, impacting cash flow.
- AMC's admissions revenue per patron declined by approximately 2.4% compared to Q4 2023, when not normalized for special events.
- The company is constrained by limited access to growth capital, affecting its ability to increase CapEx for expansion initiatives.
- AMC's share price has declined over the past three years, causing concern among shareholders and impacting investor sentiment.
