AMC Stock Gets Boost After Q1 Results Top Expectations

The security hit its lowest level in almost 12 months Monday

Deputy Editor
May 10, 2022 at 9:13 AM
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The shares of AMC Entertainment Holdings Inc (NYSE:AMC) are 3.8% higher to trade at $13 before the bell, after the movie theater company posted slimmer-than-expected first-quarter losses of 52 cents per share on $7.85.70 million in revenue, which also topped analysts' estimates. AMC called the quarter its "strongest first quarter in two full years," noting that its two big breakout films, 'The Batman' and 'Uncharted' -- which both topped the $100 million mark in the box office -- exceeded expectations as movie-going demand picks back up. 

AMC has taken a big step back since hitting the $72 level at the height of its "meme stock" popularity in early June 2021. In fact, the equity has shed nearly 54% in 2022, though it still sports a 31.7% year-over-year lead. Today, the stock is attempting to climb up from Monday's low of $12.43, as it battles pressure at the 10-day moving average. 

It's also worth noting that AMC is deep in "oversold" territory, as its 14-day Relative Strength Index (RSI) sits at just 12. This means a short-term bounce could already be priced in for the stock.

So far, just Wedbush has chimed in, cutting its price target to $4 from $5. The analyst is part of a very skeptical brokerage bunch. Heading into today, all four of the analysts in coverage considered the stock a "hold" or worse. Plus, the 12-month consensus price target of $9.95 is a 23.5% discount to last night's close. 

Options traders have been much more bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day call/put volume ratio of 2.24, which stands higher than 96% of readings from the past year. In other words, long calls have been much more popular than usual of late. 

Short-term options traders have also been incredibly call-biased. This is per the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.57, which stands in the relatively low 24th percentile of its annual range. 

Short sellers have started hitting the exits, shedding 4.5% in the last two reporting periods, but the security remains heavily shorted. The 99.75 million shares sold short make up a solid 19.4% of the stock's available float. 

 




 
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