(UPDATED) AMC Entertainment Earnings Preview: “Wen pounce?” Maybe today

UPDATE: AMC stock slid 10.5% to $16.70 afterhours on Thursday after it produced a mixed bag of results for the second quarter. The global cinema chain offered up adjusted earnings per share of $-0.20, which beat consensus by 3 cents, and revenue of $1.16 billion, which was off by $20 million. The company had total attendance of 59.1 million worldwide, well above Q1's 39 million. AMC will be paying out a special dividend that gives existing shareholders of record on August 15 preferred shares with the APE ticker. There is also a crypto coin in the works to go along with the preferred shares.

 

• AMC stock finished Wednesday up 8% as Wall Street cheered solid earnings reports. 
• AMC apes are expecting to "pounce" on earnings delivered after Thursday close.
• The theater company stock traded up 4.9% to $17.51 in Thursday premarket as possible MOASS in sight.

 

Friends, the day is finally here. AMC Entertainment (AMC) will release second-quarter earnings after the close on Thursday, and, yes, this is the same earnings report foretold in prophecy by chief AMC ape – his majesty, CEO Adam Aron. 

Also read: AMC stock extends recovery rally towards $20

It was long ago on July 7 when Aron released the all-important tweet:

"Wen pounce?" refers to the legendary MOASS: the Mother Of All Short Squeezes. AMC apes believe that AMC stock is yet to undergo its greatest short squeeze. Of course, the MOASS will not necessarily come to pass on August 4, but Aron said it would at least happen sometime after this date. Based on the latest estimates, short volume on AMC stock appears to be around 19%. One other question, since when do apes pounce?

AMC stock earnings

Wall Street consensus puts AMC's Q2 at adjusted earnings per share of $-0.23 on revenue of $1.18 billion. Analysts are mixed on their outlook ahead of the release with two upward revisions over the past quarter for both EPS and revenue, three downward for EPS, and four downward for revenue. It is a mixed bag. Significantly, AMC has beaten earnings on top and bottom lines for the last four quarters.

Graph: SeekingAlpha.com

AMC revenues have surely been rebounding faster than expected over the past year, and the revenue forecast for Q2 is up 166% YoY. The bulls expect that the quarter's solid run of films will help AMC beat the Street. During Q2 AMC would have shown all three of the top grossing movies of the year so far. Top Gun: Maverick did $1.32 billion worldwide in ticket sales. Second place Doctor Strange in the Multiverse of Madness did a surpring $955 million globally, and third place Jurassic World Dominion has gathered $943 million worldwide.

IMAX CEO Richard Gelfond recently said in an interview that his company is only running 5% under the same period in 2019, pre-pandemic. If that were true for AMC, then the company could expect revenue of $1.43 billion.

AMC stock forecast

AMC stock is already up 5% on Thursday's premarket at $19.13. Wednesday's 8% run already broke through minimal resistance at $17.50. That rally closed just shy of our target at $18.37. As we wrote yesterday: "Right now bulls will mostly be thinking about overtaking the July 21 price high of $18.37."

The next target is the supply range between $19 to $21. This area was difficult to break through back in February.

AMC share price support sits where the 9-day and 21-day moving average cross around $15.30 and then at the longer-term support trend line at $14. That trend line began ascending on May 12, so it is nearly three months old and likely rather hard to break in the near term.

AMC daily chart

 

UPDATE: AMC stock has garnered another 2.6% to $18.58 on Thursday morning. Anticipation is palpable for the second quarter earnings expected after the close. Nowhere is that excitement more present than in the options markets. About 17,500 contracts for the $20 strike price expiring on Friday have already been traded. The most recent price was $0.67 per share or $67 per 100-share contract. Call buyers are hoping for the Mother of All Short Squeezes (MOASS) to commence properly after the hoped-for earnings beat. The $17.50 put also expiring Friday has seen 2,568 contracts trade this morning with the last price at $0.60.