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AMC Entertainment (AMC) May Report Negative Revenues: Know Trends For Next Week's Release

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AMC Entertainment (AMC) is expected to see a year-over-year increase in revenue due to increased revenue when reporting its results for the quarter ended June 2022. This well-known consensus outlook gives a good understanding of the company’s earnings situation, but how strong the actual results compared to these estimates can affect short-term stock prices. It is a factor.

If these key numbers exceed expectations in the next earnings report scheduled for August 4, stock prices could rise. On the other hand, if they are missing, stock prices can fall.

Management’s business situation discussions on revenue calls primarily determine the sustainability of immediate price fluctuations and future earnings forecasts, but are worth the handicap insight into the probability of a positive EPS surprise. I have.

Zacks consensus estimate

The theater operator will record a quarterly loss of $ 0.26 per share in the next report. This corresponds to a year-on-year change of 63.4%.

Revenue is expected to increase 151.5% year-on-year to $ 1.12 billion.

Estimate of revised trends

The quarterly consensus EPS estimate has been revised to current levels, down 21.21% over the last 30 days. This essentially reflects how the covering analysts collectively re-evaluated the initial estimates during this period.

Investors should keep in mind that the direction of each cover analyst’s estimate revision is not always reflected in the overall change.

Whisper of revenue

Estimating revisions prior to announcing a company’s financial results provides clues to the business situation during the period of results. This insight is at the heart of our unique Surprise Prediction model, the Zacks Earnings ESP (Expected Surprise Prediction).

Zacks Earnings ESP compares the most accurate quarterly quote with the Zacks consensus quote. The most accurate quote is the latest version of the Zacks Consensus EPS quote. The idea here is that analysts who revise their quotes just before the announcement of financial results have the latest information. This may be more accurate than previously predicted by others contributing to consensus.

Therefore, positive or negative revenue ESP readings theoretically indicate a possible deviation of the actual revenue from the consensus estimate. However, the predictive power of the model is important only for positive ESP measurements.

Positive Earnings ESPs are a powerful predictor of revenue beats, especially when combined with Zacks Rank # 1 (Strong Buy), 2 (Buy), or 3 (Hold). According to our research, this combination of stocks has a close to 70% chance of producing a positive surprise, and a solid Zacks rank actually enhances the predictive power of Earnings ESP.

Note that negative Earnings ESP readings do not indicate a revenue error. According to our research, it is difficult to predict the earnings beat with some confidence for stocks with a negative earnings ESP measurement or a Zacks rank of 4 (sell) or 5 (strong sell). is.

How were the AMC Entertainment numbers shaped?

For AMC Entertainment, the most accurate quote is higher than the Zack Consensus quote, suggesting that analysts have recently been bullish on the company’s earnings outlook. This resulted in a revenue ESP of + 14.29%.

Meanwhile, this stock currently has Zack Rank # 4.

Therefore, this combination makes it difficult to conclusively predict that AMC Entertainment will exceed the consensus EPS estimate.

Do you have any clues in your earnings surprise history?

Analysts often consider how well they were able to match past consensus estimates when calculating a company’s future revenue estimates. Therefore, it is worth checking out a history of surprises to measure the impact on future numbers.

In the last reported quarter, when AMC Entertainment actually lost $ 0.52, it was expected to record a loss of $ 0.63 per share, a surprise of + 17.46%.

In the last four quarters, the company has exceeded the consensus EPS estimate three times.

Conclusion

The only basis for a rise or fall in stock prices may not be a beat or mistake in earnings. Many stocks eventually lose ground, even though earnings have outstripped due to other factors that disappoint investors. Similarly, unexpected catalysts help many stocks rise despite profit mistakes.

However, betting on stocks that are expected to exceed earnings expectations increases the odds of success. Therefore, it is worth checking the revenue ESP and Zack Rank of a company prior to its quarterly release. Before reporting, use the Earnings ESP Filter to find the best stock to buy or sell.

AMC Entertainment doesn’t seem to be an attractive revenue-making candidate. However, investors need to be aware of other factors as they bet on this stock and move away from it before the earnings announcement.

Expected results for industry players

Among the shares in the Zacks Leisure and Recreation Services industry, Caesars Entertainment (CZR) is expected to generate $ 0.25 per share in the quarter ending June 2022 shortly. This estimate shows a year-on-year change of -47.9%. Revenue for the quarter is expected to increase 10.9% year-on-year to $ 2.77 billion.

Caesars Entertainment’s consensus EPS estimate has been revised down 15.6% to its current level in the last 30 days. However, the higher the most accurate estimate, the higher the revenue ESP will be 1.82%.

Combined with Zacks Rank # 3 (pending), this revenue ESP shows that Caesars Entertainment is likely to exceed the consensus EPS estimate. In the last four quarters, the company has exceeded the consensus EPS estimate twice.

Stay tuned for upcoming earnings announcements on Zacks’ earnings calendar.

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The views and opinions contained in this document are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.