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Troubled cinema theater chain AMC (NYSE: AMC) is scheduled to report its Q3 earnings on Wednesday, with consensus analyst estimates projecting a year-over-year revenue increase of 27%. The company’s Q3 report could be its strongest since the pandemic’s start, but investors are yet to regain confidence in the stock following a myriad of challenges. 

Wall Street’s Earnings and Revenue Expectations for AMC

AMC Entertainment is set to disclose its Q3 results following the market close on November 8, with Wall Street analysts mainly expecting a solid quarterly performance from the cinema chain operator.

Notably, the company is projected to report revenue of $1.23 billion in the third quarter, up 27% year-over-year. On average, AMC is expected to post a loss per share of 0.27 cents, compared to the 22 cents it posted a year ago. Net loss per share is forecasted to hit 44 cents. 

However, despite optimistic expectations for its Q3 numbers, these estimates are still behind the revenue AMC posted before the pandemic. For instance, the company generated $1.32 billion in third-quarter revenue, 6.8% higher than the consensus estimates for the most recent quarter. 

Nevertheless, the upcoming Q3 report is poised to become AMC’s strongest in terms of revenue since the beginning of the COVID-19 pandemic. The reason for this is the strong rebound in the movie theater industry in 2023, driven by numerous blockbuster film releases and the return of moviegoers to cinema theaters. This has been reflected in the industry’s numbers, which continue accelerating toward pre-pandemic levels. 

Positive Q3 Report Could Boost AMC Stock, but Long-Term Challenges Remain

On the other hand, the same optimism cannot be shared when talking about AMC’s stock performance. The company’s shares fell more than 63% this year to $11.07 apiece – the lowest since January 2021. 

Many of these declines can be attributed to the fiasco related to the company’s decision to convert its AMC and AMC preferred shares (APE) earlier this year. In addition, the shares took another beating in September when the company announced it had entered into an equity distribution agreement to sell 40 million shares to leading corporate giants. 

Having said that, the forthcoming quarterly report, if positive, could provide a much-needed boost to AMC’s stock. But despite optimistic expectations, analysts remain largely bearish on the cinema chain, mainly because of its discouraging fundamentals. 

The company still has a huge debt pile relative to its cash-generating capabilities and cash reserves. That said, Wall Street giants will want to see the company adequately address its core business model and profitability issues first before turning bullish on it once again. At the moment, the average 12-month price target on the stock sits at $9.69 – 13% lower than its current stock price – coupled with a consensus rating of ‘Moderate Sell.’ 

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