2 Reasons to Sell AMC Entertainment Stock
AMC Entertainment Holdings (NYSE: AMC) stock is soaring, with shares up by a jaw-dropping 2,850% year to date as the meme-stock bubble reinflates. But long-term investors should think twice before hopping on this bandwagon. AMC's valuation is out of line with its poor fundamentals. And the company may dilute equity holders to sustain its cash burn and meet debt obligations.
Trading for $59 per share, AMC boasts a market cap of $30.5 billion, which is roughly 68 times its revenue over the trailing 12 months. Investors may be optimistic about the company's ability to bounce back from the coronavirus pandemic, which dramatically lowered sales in 2020. But so far, the company's fundamentals don't indicate a strong recovery.
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Source Fool.com
