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On Friday, B.Riley initiated coverage on AMC Entertainment Holdings, Inc. (NYSE:AMC), assigning a Neutral rating and setting a price target of $3.00, aligning closely with the current stock price of $2.81. According to InvestingPro data, AMC’s stock has experienced significant volatility, with a 37% decline over the past six months. The firm’s decision reflects a cautious stance towards the company’s near-term prospects, influenced by a softer performance in the first quarter box office results.
AMC Entertainment’s first-quarter box office shortfall prompted B.Riley to revise down its 2025 Adjusted EBITDA (AEBITDA) estimates. With current EBITDA at $271.3 million and a concerning cash burn rate highlighted by InvestingPro’s analysis, the company faces significant challenges. However, the firm anticipates a robust recovery for AMC over the subsequent three quarters, forecasting a cumulative total from the second to the fourth quarter of 2025 ($499 million) that has not been achieved since before the pandemic. This projected performance is expected to reach 65% of AMC’s peak in 2018.
The analysts’ confidence in their model is based on several key factors. They cite an impressive film lineup scheduled for 2025-2026, which is likely to drive attendance and revenue. Additionally, AMC’s strategic measures under its ’GO Plan’ are expected to contribute positively to the company’s recovery. These initiatives include an aggressive expansion of Premium Large Format (PLF) experiences, installation of Laser projectors across all domestic theaters, and upgraded seating arrangements.
Moreover, AMC has enhanced its food and beverage options, which has led to record revenue per patron. These strategic moves are part of AMC’s broader efforts to improve customer experience and drive growth.
Despite these positive developments, B.Riley notes that AMC’s balance sheet remains heavily leveraged, with total debt reaching $8.3 billion and a concerning current ratio of 0.42, according to InvestingPro data. The firm believes this could weigh on the company’s stock performance. AMC did undertake a series of refinancing transactions in the previous year that extended significant debt maturities until 2029, potentially providing some financial stability for the near future. However, the high leverage is still seen as a concern for the company’s financial health and stock valuation. Get access to AMC’s complete financial health analysis and 13 additional key ProTips with an InvestingPro subscription.
In other recent news, AMC Entertainment reported its first-quarter 2025 earnings, revealing a larger-than-expected loss with an EPS of -0.58, missing the forecasted -0.46. The company’s revenue also fell short of expectations, coming in at $862.5 million compared to the projected $986.48 million. Despite these challenges, AMC’s management expressed optimism about future box office performance, citing a strong lineup of upcoming films and a notable recovery in box office receipts during April and early May. Benchmark analyst maintained a Hold rating for AMC, acknowledging the company’s revenue and Adjusted EBITDA surpassing market expectations.
Additionally, AMC has launched a new discount initiative called "50% Off Wednesdays," offering half-price tickets to AMC Stubs members to boost midweek attendance. This program complements existing discounts on Tuesdays and is part of AMC’s strategy to enhance the moviegoing experience. The company’s CEO, Adam Aron, attributed this pricing strategy to recent improvements in box office performance and expressed hope that it would replicate the success of Discount Tuesdays. AMC continues to focus on premium viewing experiences and loyalty programs to increase customer value, while also addressing liquidity concerns.
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