AMC Stock Analysis


AMC Stock Analysis

Business Description:

  • 57% of 2020 revenues from Admission vs 60.3% in 2019

  • 29% of 2020 revenues from Food and Beverage vs 31% in 2019

  • 13% of 2020 revenues from others vs 8% in 2019

  • 2020 revenues down by 77% from 2019

  • $2.15 billion goodwill impairment in 2020

  • Wanda, which used to own 23% of company with 47% of voting powers converted their Class B shares into Class A shares, giving them only 9% ownership with 9% voting rights

  • This share conversion along with other share issuance by the company lead to a 380% share dilution in the TTM

  • 21% of shares outstanding are short and company targetted by WSB speculators


Catalysts:

  • Recovery from pandemic and recession

  • Targeted by speculators forcing a short squeeze to happen


Risks:

  • Speculative and very volatile stock

  • May never go back to pre-pandemic numbers

  • Growth of streaming platforms

  • High debt with negative tangible book value for years


Financial Analysis:

  • Revenues of $1.24 Billion in FY20 down from $5.47 Billion in FY19

  • Operating loss of $1.54 Billion in FY20 vs operating income of $235 million in FY19

  • Net loss of $4.58 billion in FY20 vs net loss of $149 million in FY19

  • Free Cash outflow of $1.30 billion in FY20 vs FCF $60 million for FY19

  • Balance Sheet

  • Total assets: $10.4 Billion ; total liabilities: $12.7 Billion; book value: ($2.29 Billion)

  • Cash: $813 million, debts: $5.45 Billion, current assets: $1.01 billion, current liabilities: $1.58 billion


Valuations:

  • My personal Biases:

  • I made over 3300% on average on the GameStop Short Squeeze and AMC has nothing of the same fundamentals that GameStop had

  • Assumptions for base case:

  • 40% of 2019 revenues in 2021

  • 70% of 2019 revenues in 2022

  • Revenue growth of 10% annually till 2025

  • Positive FCF in 2023, 5% margin

  • Terminal Growth rate of 0%

  • Discount Rate of 18%

AMC Stock Analysis
  • Exit multiple analysis not necessary to see that stock is expensive

Conclusion

  • Stocks massively overvalued

  • Short Squeeze already happening with no catalyst to invest at such a price


Here's the full analysis: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/32880958


AMC Stock Analysis

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