Earnings Outlook: AMC’s Q3 results on deck: Will the meme stock darling shake off concerns of a box office slowdown?

United States

AMC Entertainment Holdings Inc. reports third-quarter results on Nov. 8, with the meme stock darling expected to deliver a narrowing loss, despite a “dearth” of new movie titles in part of the quarter.

The movie theater operator was a victim of pandemic-era lockdowns before attaining a meme stock status that sent its stock skyrocketing last year, then plummeting back to earth.

Analysts surveyed by FactSet are looking for AMC AMC, -4.70% to report a net loss of $ 199 million, or 18 cents a share, after a loss of $ 224 million, or 27 cents a share, in the prior year’s quarter. The company is expected to report sales of $ 961 million, up from $ 756 million in the same period last year, according to FactSet.

See Now: AMC stock sinks to pre-‘meme stock’ levels as B. Riley slashes price target by 32%

AMC’s admissions revenue is expected to be $ 552 million, compared with $ 421 million in the same period last year, FactSet data show. Analysts project concessions sales of $ 324 million, up from $ 263 million in the prior year’s quarter.

In its second quarter, AMC reported a narrowing loss that beat expectations and revenue in line with analysts’ forecasts. However, it said that this year’s third quarter will be relatively quiet in terms of major movie releases. In August, when AMC reported the results, CEO Adam Aron spoke of the “dearth” of new big movie titles being released in that month and September, adding that “things will slow for several weeks.” 

In a note released last month, B. Riley analyst Eric Wold slashed his AMC price target, citing concerns that the post-pandemic box office recovery will take longer than previously forecast. The number of films released to cinemas remains around 50% below pre-pandemic levels, he warned.

See Now: Are you tempted to buy AMC’s new APEs? Be prepared to lose everything, the company warns

“We now believe it may not be until 2024 before the domestic box office can again surpass $ 11 billion—as was the case for every year between 2015 and 2019,” Wold wrote. The price cut pushed AMC’s stock down to pre-“meme stock” levels.

Nonetheless, the last few months have been eventful for AMC. The company’s AMC Preferred Equity Units, or APEs APE, made their trading debut in August, sparking volatility and heralding the latest chapter in an eventful journey that took the cinema chain from beleaguered pandemic victim to meme-stock phenomenon.

With its APE equity unit, AMC created something like a 2-for-1 stock split, marking the company’s latest effort in a fight over stock issuances. AMC is also taking aim at its massive debt burden with the APE special dividend. The name is a nod to the investors who turned the company into a meme stock, who often refer to themselves as “apes” or “ape nation.” AMC issued an APE for each of its roughly 517 million shares outstanding.

See Now: Is the golden age of the meme stock rally over?

However, the APEs have fallen 69.5% since their debut. The dividend has fluctuated from an intraday low of $ 1.48 on Oct. 13 and an intraday high of $ 10.50 on Aug. 22.

In September AMC also unveiled plans to sell another up to 425 million APEs, sending the equity units toward a new low.

AMC’s stock has fallen 63% this year, outpacing the S&P 500 index’s SPX, -1.52% decline of 18.6% over the same period. Over the last three months, AMC has fallen 44.8%, compared with the S&P 500 index’s fall of 6.7%. Fellow meme stock GameStop Corp.’s GME, -5.53% stock has fallen 25.2% in the last three months.

See Now: Is the golden age of the meme stock rally over?

While AMC remains a cause célèbre for a vocal community of individual investors, the company’s financial health is a cause for concern, according to data from RapidRatings, a company that assesses the finances of public and private companies.

Of eight analysts surveyed by FactSet, three have a hold rating and five have a sell rating for AMC.