AMC Entertainment Holdings Inc shares have outperformed the S&P 500 in the past 12 months, generating a total return of 964.5 percent.
Earnings
A price-to-earnings ratio (PE) is one of the most basic fundamental metrics for gauging a stock’s value. The lower the PE, the higher the value.Growth
Looking ahead to the next four quarters, the S&P 500’s forward PE ratio looks much more reasonable at just 20.9. Unfortunately, analysts are not expecting AMC to turn a profit over the next four quarters. The current consensus earnings per share estimate for AMC for 2022 is a 75-cent loss. AMC’s media/communication sector peers are currently averaging a 20.9 forward earnings multiple.Yet when it comes to evaluating a stock, earnings aren’t everything.
The growth rate is also critical for companies that are rapidly building their bottom lines. The price-to-earnings-to-growth ratio (PEG) is a good way to incorporate growth rates into the evaluation process. The S&P 500’s overall PEG is about 1.0. Once again, without positive earnings, AMC doesn’t have a positive PEG ratio to use as a valuation gauge.
Price-to-sales ratio is another important valuation metric, particularly for unprofitable companies and growth stocks. The S&P 500’s PS ratio is 3.21, well above its long-term average of 1.63. AMC’s PS ratio is 7.5, more than double the S&P 500 average. AMC’s PS ratio is also up 453 percent over the past five years, suggesting the stock is priced at the high end of its historical valuation range.