Is it time to invest in AMC as it reports record pandemic period revenue in October?

on Nov 1, 2021
Updated: Aug 31, 2022
  • AMC Entertainment shares on Monday gained 2.66% after reporting solid monthly sales.
  • The company said October revenue was the highest since February 2020.
  • AMC is expected to report its fiscal Q3 results on the 8th of November.

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On Monday AMC Entertainment Holdings Inc. (NYSE:AMC) shares gained 2.66% after announcing solid monthly sales. The company said it received record theatre attendance last month, thus reporting the highest revenue for a single month since February 2020.

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The company could continue witnessing a ramp-up in monthly revenue growth in November and December amid the several blockbuster movies scheduled to premiere and a busy holiday season. The company said its ticket admissions for October hit new 20-month highs both domestically and internationally.

Time to bet on AMC’s growth?

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From an investment perspective, AMC shares trade at a steep P/S ratio of 20.67, making the stock less attractive to value investors.

However, analysts are optimistic about its growth prospects. They expect its earnings per share to grow by 92.80% this year before increasing by 74.10% next year.

Therefore, although bargain hunters might find the stock less compelling, it could gain the attention of long-term growth investors.

Source – TradingView

Technically, AMC shares seem to be trading within a descending channel formation in the intraday chart. However, the stock has recently bounced back to avoid falling into oversold conditions, thus creating an interesting opportunity for investors.

Therefore, with shares far from reaching overbought conditions and considerably below the 100-day moving average, investors could target extended gains at about $41.36, or higher at 448.63. 

On the other hand, if the stock finds strong trendline resistance, triggering a pullback, it could find support at $32.29 and $25.53.

A channel breakout could be imminent

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In summary, although AMC shares trade at a steep P/E ratio, its exciting growth prospects could attract long-term investors, thus pushing the stock price higher.

Therefore, with shares gar from reaching overbought conditions and revenues on the rise, it could be time to buy the AMC stock.

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