On Thursday, approximately one year since the World Health Organization labeled the Covid-19 virus as a pandemic, shares of AMC Entertainment Holdings Inc. AMC climbed over 3% on the back of its fourth-quarter and full-year 2020 earnings release.
For the quarter ending December 2020, the Leawood, Kansas-based theater movie chain reported a diluted net loss of $6.21 per share compared with a diluted net loss of 13 cents per share in the prior-year quarter. Despite this, revenues of $162.5 million topped the Refinitiv estimate of $142.3 million.
Company updates earnings and business operations
AMC CEO Adam Aron said that 2020 presented the company with "the most challenging market conditions" in the company's more-than-100-year history. Despite this, the company took "swift and decisive actions" to ensure the company's survival: Aron added that over 8 million U.S. and international patrons "confidently" returned to an AMC theater thanks in part to the company's "AMC Safe & Clean" protocols.
As of December 2020, the movie chain operated 394 domestic theaters with capacity of between 20% and 40%, representing approximately two-thirds of domestic theaters and same-theater revenue.
The company's earnings release comes a few days after several U.S. states reopen businesses and lift mask mandates despite warnings from White House Chief Medical Advisor Dr. Anthony Fauci that the U.S. is not "out of the woods" yet in terms of the pandemic. While new daily infections average around just 57,000, down from the January average of over 250,000, new infections could still plateau at an "unacceptably high level" according to the White House chief medical advisor.
Stock soars as revenue tops estimates
Shares of AMC traded around $10.23, up approximately 3.86% from Wednesday's close of $9.85. Despite this, the stock is significantly overvalued based on Thursday's price-to-GF-Value ratio of 2.40.
GuruFocus ranks the company's financial strength 1 out of 10 on several warning signs, which include a low Piotroski F-score of 3 and a cash-to-debt ratio that underperforms over 92% of global competitors.
Gurus with holdings in AMC include Pioneer Investments (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio)' Tudor Investment and Joel Greenblatt (Trades, Portfolio)'s Gotham Asset Management.
Disclosure: No positions.
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