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Why AMC Entertainment Stock Just Popped

Why AMC Entertainment Stock Just Popped

Globe and Mail19 hours ago
Key Points
AMC broke even in Q2, losing no money -- or at least not much.
The company also generated substantial free cash flow in the quarter.
For the first half of 2025, however, AMC stock remains free cash flow negative.
10 stocks we like better than AMC Entertainment ›
Shares of meme stock and theater operator AMC Entertainment (NYSE: AMC) jumped 3.8% through 12:10 p.m. ET Monday after exceeding expectations for second-quarter earnings.
Heading into today's report, analysts forecast AMC to lose $0.09 per share (adjusted for one-time items) on sales of just over $1.3 billion. In fact, AMC broke even with a loss of $0, and sales were just under $1.4 billion.
AMC Q2 earnings
AMC actually did lose some money. (Only the adjusted results showed breakeven numbers.) When calculated according to generally accepted accounting principles (GAAP), AMC lost $0.01 per share -- which was still much better than the $0.10 per share the company lost in last year's Q2.
The best news of all, though, is that free cash flow for the quarter turned positive, with AMC generating positive cash profits of $88.9 million in the quarter. CEO Adam Aron argued this result "showcased the impressive operating leverage inherent in our business," and expressed the hope that this is "a harbinger of things to come."
Is AMC stock a buy now?
Before you get too excited about AMC stock, however, there are some caveats to consider:
First and foremost is that, while AMC generated cash in Q2, it burned a lot of cash in Q1, such that FCF for the first six months of this year is still deeply negative: $328.1 million -- and actually, a bit worse than the company was doing one year ago. To offset the cash burn, AMC is still taking on new debt ($240 million in Q2) and converting old debt to dilutive stock ($143 million).
Long story short, breakeven is good. Profitable and FCF-positive would be better. AMC stock is still a sell for me.
Should you invest $1,000 in AMC Entertainment right now?
Before you buy stock in AMC Entertainment, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AMC Entertainment wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,119,863!*
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