AMC Entertainment Holdings, Inc. AMC has staged an impressive comeback on the stock market. Shares have rallied 41.4% over the past three months, significantly outperforming the industry's 2.3% growth.
The sharp move reflects renewed investor optimism as improving box office trends, stronger operating performance and balance sheet initiatives signal that the theater operator may finally be emerging from years of post-pandemic challenges.
In the same time frame, AMC stock has also outperformed other industry players like IMAX Corporation IMAX and The Marcus Corporation MCS.
Price Performance
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However, after such a strong run, investors face an important question: Is AMC still a buy, or is it time to take some profits?
A Stronger Business Is Driving the Rally
AMC's latest quarterly results suggest that the company's fundamentals are improving alongside its stock price. During the first quarter of 2026, revenues increased 21.2% year over year to $1.05 billion, surpassing expectations. While the company reported a loss of 36 cents per share, management emphasized that profitability continues to improve as attendance recovers.
The biggest highlight was adjusted EBITDA, which improved by roughly $96 million from the prior-year quarter to reach its strongest first-quarter level since before the pandemic. Management credited the improvement to higher attendance, better per-patron spending and disciplined cost management across both North America and Europe.
The recovery was supported by a 13.6% increase in global attendance, with nearly 47.6 million moviegoers visiting AMC theaters during the quarter. More importantly, customers spent more on tickets, premium experiences and concessions, helping the company post record first-quarter revenue per patron and contribution margin.
A Robust Film Slate Could Sustain Momentum
One of the biggest reasons for management's optimism is the strength of the 2026 movie lineup. After several years of disruptions caused by pandemic-related delays and Hollywood labor strikes, the release calendar has become considerably stronger. AMC believes the North American box office could grow $500 million to $1.2 billion compared with 2025, supported by a steady pipeline of blockbuster releases from major studios.
Management noted that both franchise films and original content are expected to drive theater attendance throughout the year. It also highlighted improving performance in Europe, where foreign-language releases have contributed to stronger-than-expected results.
A healthier content pipeline is particularly important because AMC's business enjoys significant operating leverage. As attendance increases, a larger portion of incremental revenues flows to earnings since many operating costs remain relatively fixed.
Premium Experiences Continue to Differentiate AMC
AMC is also expanding beyond the traditional movie theater model. The company continues to invest heavily in premium large-format screens, including IMAX, Dolby Cinema, ScreenX and its proprietary XL auditoriums. Premium formats command higher ticket prices and remain popular among moviegoers seeking an enhanced viewing experience.
Management also plans to install more Club Rocker seating in high-performing locations after encouraging customer response at select theaters.
Beyond movies, AMC is introducing "Arena 1 at AMC," a live interactive concert platform that will allow audiences to experience real-time concerts simultaneously across hundreds of theaters in the United States before expanding into Europe. This initiative creates another potential revenue stream while utilizing existing theater infrastructure.
The company's merchandise business is also becoming increasingly meaningful, with management expecting continued double-digit growth as demand for movie-themed collectibles remains strong.
Balance Sheet Continues to Improve
Perhaps the most encouraging development for long-term investors is AMC's continued focus on strengthening its balance sheet. During the quarter, the company refinanced $400 million of debt due in 2027, extending maturities to 2031 while reducing interest costs. It also converted approximately $156 million of debt into equity, further lowering leverage.
AMC additionally raised fresh capital through its at-the-market equity program and monetized part of the investment in Hycroft Mining, increasing liquidity. At quarter-end, the company held $339 million in cash, excluding restricted cash.
Management believes these initiatives provide greater financial flexibility while positioning AMC to benefit from improving industry conditions.
AMC’s Bottom Line Improves
AMC’s loss estimates for 2026 have narrowed in the past 30 days. Its top line in 2026 is likely to witness growth of 11.2%.
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On the other hand, IMAX and Marcus earnings in the current year are likely to witness growth of 16.6% and 188.2% year over year, respectively.
AMC Trades at a Discount
AMC is trading at a discount on a forward 12-month price-to-sales (P/S) ratio basis. Its forward 12-month P/S ratio stands at 0.31X, lower than the industry.
AMC P/S Ratio (Forward 12 Months)
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End Notes
Despite the recent rally, AMC still offers a compelling long-term investment case as its operational recovery continues to gain traction. The company is benefiting from stronger box office trends, improving theater attendance, higher spending per customer and continued investments in premium experiences that support revenue growth and margin expansion. Management is also making meaningful progress in strengthening the balance sheet through debt reduction, refinancing and improved liquidity, enhancing financial flexibility.
While competitors are expected to deliver solid earnings growth, AMC's own earnings outlook is improving as losses are projected to narrow alongside healthy revenue growth. Moreover, the stock continues to trade at an attractive valuation relative to the industry, suggesting that the recent share price appreciation has not fully reflected its improving fundamentals. If the theatrical recovery remains on track, AMC could still offer additional upside for patient investors.
The company currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).