Theater company AMC Entertainment (NYSE:AMC) announced better-than-expected revenue in Q3 CY2025, but sales fell by 3.6% year on year to $1.3 billion. Its non-GAAP loss of $0.21 per share was in line with analysts\u2019 consensus estimates.<\/p>\n
Is now the time to buy AMC Entertainment? Find out in our full research report<\/a>.<\/p>\n Revenue:<\/strong> $1.3 billion vs analyst estimates of $1.22 billion (3.6% year-on-year decline, 6.3% beat)<\/p>\n<\/li>\n Adjusted EPS:<\/strong> -$0.21 vs analyst estimates of -$0.22 (in line)<\/p>\n<\/li>\n Adjusted EBITDA:<\/strong> $122.2 million vs analyst estimates of $96.36 million (9.4% margin, 26.8% beat)<\/p>\n<\/li>\n Operating Margin:<\/strong> 2.8%, down from 5.3% in the same quarter last year<\/p>\n<\/li>\n Free Cash Flow<\/strong> was -$81.1 million compared to -$92.2 million in the same quarter last year<\/p>\n<\/li>\n Market Capitalization:<\/strong> $1.29 billion<\/p>\n<\/li>\n<\/ul>\n With a profile that was raised due to meme stock mania beginning in 2021, AMC Entertainment (NYSE:AMC) operates movie theaters primarily in the US and Europe.<\/p>\n A company\u2019s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, AMC Entertainment grew its sales at a 14% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.<\/p>\n Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. AMC Entertainment\u2019s recent performance shows its demand has slowed as its annualized revenue growth of 1.8% over the last two years was below its five-year trend. Note that COVID hurt AMC Entertainment\u2019s business in 2020 and part of 2021, and it bounced back in a big way thereafter.<\/p>\n This quarter, AMC Entertainment\u2019s revenue fell by 3.6% year on year to $1.3 billion but beat Wall Street\u2019s estimates by 6.3%.<\/p>\n Looking ahead, sell-side analysts expect revenue to grow 8.9% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.<\/p>\n Microsoft, Alphabet, Coca-Cola, Monster Beverage\u2014all began as under-the-radar growth stories riding a massive trend. We\u2019ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report<\/a>.<\/p>\n AMC Entertainment\u2019s operating margin has been trending up over the last 12 months, but it still averaged negative 2.7% over the last two years. This is due to its large expense base and inefficient cost structure.<\/p>\n<\/p><\/div>\n In Q3, AMC Entertainment generated an operating margin profit margin of 2.8%, down 2.6 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.<\/p>\n Revenue trends explain a company\u2019s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth \u2013 for example, a company could inflate its sales through excessive spending on advertising and promotions.<\/p>\n Although AMC Entertainment\u2019s full-year earnings are still negative, it reduced its losses and improved its EPS by 62% annually over the last five years. The next few quarters will be critical for assessing its long-term profitability.<\/p>\n In Q3, AMC Entertainment reported adjusted EPS of negative $0.21, down from negative $0.04 in the same quarter last year. Despite falling year on year, this print beat analysts\u2019 estimates by 2.3%. Over the next 12 months, Wall Street expects AMC Entertainment to improve its earnings losses. Analysts forecast its full-year EPS of negative $0.97 will advance to negative $0.41.<\/p>\n We were impressed by how significantly AMC Entertainment blew past analysts\u2019 EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street\u2019s estimates. Zooming out, we think this was a solid print. The stock remained flat at $2.52 immediately following the results.<\/p>\n\n
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