AMC Stock Popped During Memorial Day. Can It Maintain That Momentum?

Core Viewpoint - AMC Entertainment has experienced a record Memorial Day weekend, generating excitement for a strong summer movie season, despite its stock being down approximately 31% over the past year and nearly 90% over the past five years [1][2]. Company Performance - AMC remains the largest movie theater chain in the U.S. and Europe, with around 900 locations and over 10,000 screens globally [3]. - The company has focused on increasing revenue per moviegoer by enhancing premium formats like IMAX and Dolby Cinema, as well as expanding dine-in options and alcohol sales, which have contributed to a 51% increase in incremental profit per moviegoer compared to 2019 [5][10]. - Despite a sharp rebound in ticket sales in April and a strong May, AMC's recent quarterly revenue fell 9% year over year to $862.5 million, marking the weakest first-quarter domestic box office performance since 1996 [6][7]. Financial Position - AMC ended the quarter with over $4 billion in debt and only $378.7 million in cash, alongside free cash flow outflows of $417 million for the quarter [8]. - The company incurred $407 million in interest expenses in 2024, resulting in a negative operating cash flow of $50.8 million for the year [9]. - AMC has raised over $1 billion in equity in 2023 and 2024 to strengthen its finances, although this has diluted shareholders [9]. Industry Outlook - With Hollywood returning to normalcy post-strikes, the film release schedule is expected to improve, potentially driving more consistent attendance throughout the year [11]. - AMC is positioned to benefit from a moviegoing rebound if attendance returns, cash flow improves, and debt reduction progresses [12].