Key points:
- The AMC Entertainment stock price has risen 49.6% since Friday.
- The TopGun Maverick Movie’s performance primarily drove the move.
- AMC is the most solid movie theatre operator after last year’s meme craze.
- So should you buy AMC shares? Read on to find out.
The AMC Entertainment Holdings Inc (NYSE: AMC) stock price has soared by 49.6% since Friday, primarily due to the fantastic opening weekend of TopGun Maverick, the much-anticipated action movie.
TopGun Maverick, a sequel to the 1986 movie ‘TopGun’, has received critical acclaim, with many critics saying that it is much better than the original movie. The movie had grossed $216 million yesterday after debuting in US cinemas on Friday. It is shaping up to be one of the highest-grossing movies of 2022.
Also read: The Five Best Momentum Stocks To Buy Right Now.
As the largest movie theatre operator in the world, AMC is set to benefit immensely from TopGun’s impressive performance, which has drawn hordes of moviegoers to its theatres.
While most investors are focused on TopGun Maverick’s performance, we should not forget that the movie theatre operator also makes a significant portion of its revenues from concessions sales.
Most moviegoers will buy the $11 ticket to watch TopGun Maverick and spend an equal amount buying concessions such as popcorn which they can indulge in as they watch the blockbuster movie.
While the revenues from ticket sales are shared with the movie production companies, movie theatre operators tend to keep a large portion of their concessions sales. Although they might share the revenues with other parties operating the concessions stands.
Investors were pleased to see that TopGun Maverick’s target audience of over 40-year-olds turned up to watch the sequel to the original movie 36 years later. This population group had been highly reluctant to show up at movie theatres given their high risk of contacting COVID-19 as opposed to younger audiences.
For investors wondering if they should buy AMC shares, I would say that it is the best bet within the movie theatre industry.
Unlike its peers, such as Cineworld, which is struggling under a massive debt burden, AMC is flush with cash following last year’s meme stock craze that saw its share rally to $72.50. This is why I would choose AMC over its peers.
*This is not investment advice. Always do your due diligence before making investment decisions.
AMC entertainment stock price.
The AMC Entertainment stock has risen 49.57% from Friday’s opening price of $10.43 to its current price of $15.60
