AMC Entertainment (AMC) Valuation After Hycroft Stake Sale and Refocus on Core Theater Business
AMC Entertainment Holdings (AMC) has cashed in most of its Hycroft Mining stake, securing roughly $24.1 million in proceeds while keeping a smaller equity position and warrants, signaling a renewed focus on its core theater business.
See our latest analysis for AMC Entertainment Holdings.
The move to exit most of Hycroft comes after a tough stretch for shareholders, with a year to date share price return of negative 43.28 percent and a 1 year total shareholder return of negative 48.76 percent. This suggests momentum has been fading even as management looks to refocus on the cinema business.
If you are weighing where to redeploy capital after a volatile name like AMC, it could be worth exploring fast growing stocks with high insider ownership as a fresh set of ideas.
With the stock down sharply over multiple years but analysts still seeing upside to the current price, investors now face a key question: Is AMC trading below its true value, or is the market already pricing in any future recovery?
Most Popular Narrative: 31.7% Undervalued
With AMC closing at $2.28 versus a most popular narrative fair value of $3.34, the story implies meaningful upside if its recovery blueprint lands.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $5.7 billion, earnings will come to $541.4 million, and it would be trading on a PE ratio of 5.5x, assuming you use a discount rate of 12.3%.
Want to see what turns persistent losses into substantial earnings and a low future multiple? The narrative leans on bold growth, margin, and re rating assumptions. Curious which levers really drive that upside case? Read on to unpack the full playbook behind this valuation call.
Result: Fair Value of $3.34 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, several risks linger, including still depressed theater attendance and heavy capital needs for premium upgrades that could weaken the bullish recovery narrative.
Find out about the key risks to this AMC Entertainment Holdings narrative.
Build Your Own AMC Entertainment Holdings Narrative
If you are skeptical of this outlook or simply prefer to dive into the numbers yourself, you can build a bespoke view in just minutes: Do it your way.
A great starting point for your AMC Entertainment Holdings research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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