Is AMC Entertainment (AMC) Setting Up for a Big Move?

AMC Entertainment Holdings Inc. (AMC) is involved in the theatrical exhibition business. It owns, operates or has interests in theatres located in the United States and Europe. The company provides best-in-class amenities such as plush, power recliners, MacGuffins full bars, AMC Dine-In Theatres, premium presentation…

AMC Entertainment Holdings Inc. (AMC) has become one of the top meme stocks as Reddit traders forecast a large turnaround for the company. The retail investors expect a short squeeze and consumers heading back to movie theaters. While the company is recovering, its revenue is still considerably lower than its 2017 through 2019 numbers.

While its current cash balance of $1.6 billion is much higher than its short-term debt of only $29 million, it is considerably lower than its massive long-term debt of $10.3 billion. Sales have lost an average of 34.7% per year over the last three years.

However, revenues are expected to rise 581.3% year over year in the current quarter leading to a Growth Grade of B in our POWR Ratings system.  The stock looks very overvalued, though, with a price to sales ratio of 9.6. AMC was showing bullish momentum in June only to fall in July. Performance has been mixed since. This is evident in the chart below.

Take a look at the 1-year chart of AMC below with my added notations…

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