Is There Any Hope Left for This Former Meme Stock, Down 35% in 2025?

• "Meme mania" has agelong since passed for AMC Entertainment, which has fallen implicit 99% from its 2021 highs, and much than 35% this twelvemonth alone.

• Despite being acold cheaper today, the banal is richly priced erstwhile utilizing fundamentals-based valuation metrics.

• With cheaper alternatives retired determination for investors bullish connected a betterment successful the movie theatre industry, don't springiness your hopes up connected AMC Entertainment.

• 10 stocks we similar amended than AMC Entertainment ›

Nearly 5 years ago, AMC Entertainment (NYSE: AMC) was not conscionable 1 of the apical meme stocks. It was 1 of the "meme kings," alongside GameStop (NYSE: GME). During the archetypal 2021 question of meme banal mania, shares successful some companies surged to grounds prices, a rally fueled astir wholly by speculation and hype.

Although the inclination peaked not excessively agelong aft it started, shares successful some companies managed to clasp connected to a just magnitude of their respective meme gains for rather immoderate time. In fact, GameStop -- trading successful the debased $20s contiguous -- is inactive technically up from its pre-trend level.

Unfortunately, it hasn't been the aforesaid communicative for AMC. Shares successful the movie theatre concatenation are down implicit 99% from their meme highs, and down implicit 35% conscionable this twelvemonth alone. Worse yet, portion seemingly a bargain today, overmuch suggests AMC inactive trades astatine an inflated valuation and could beryllium susceptible to further terms declines.

In aboriginal 2021, AMC was successful atrocious shape. Like different movie theatre chains, the pandemic had a terrible interaction connected its business. Burning done currency enactment the institution astatine hazard of bankruptcy. Hence, galore hedge funds stake heavy against it by shorting the stock.

However, aft their occurrence coordinating an epic abbreviated compression with GameStop, galore of the aforesaid retail traders piled into AMC, attempting to propulsion disconnected the aforesaid trick. At first, this was successful. From January to June 2021, AMC surged from a split-adjusted $20 per share, to good implicit $500 per share.

Yet arsenic a effect of this immense surge successful price, AMC began selling recently issued shares to rise money. While this brought successful much-needed cash, it besides led to dense stock dilution. Add successful AMC's struggles to instrumentality to pre-COVID levels of gross and profitability, and it's nary astonishment that meme mania faded, and the banal has since experienced a dependable drop.

At a small implicit $2.50 per share, AMC Entertainment whitethorn look ungraded cheap. But don't mistake a debased banal terms for a debased valuation. AMC has yet to instrumentality to profitability nether mostly accepted accounting principles (GAAP). But it is profitable connected the ground of net earlier interest, taxes, depreciation, and amortization (EBITDA), truthful we tin worth it utilizing the enterprise-value-to-EBITDA metric (EV/EBITDA).