Shares of AMC Networks (AMCX 0.79%) fell 11.8% in November, according to data from S&P Global Market Intelligence. The content producer and broadcaster reported mixed third-quarter earnings on the last day of October, setting the stage for a flurry of analyst downgrades and price target cuts in early November.
AMC's third-quarter earnings rose 7.3% year over year to $2.07 per share. Revenue climbed 3.1%, stopping at $719 million. Your average analyst would have settled for earnings near $1.66 per share, but the Street was also looking for a richer revenue stream of approximately $734 million.
CEO Josh Sapan expects his streaming services to reach an annual revenue level of $0.5 billion by the year 2024. Meanwhile, both ad sales and subscription revenue are stalling in AMC's much larger national networks division. Assuming that the current cord-cutting trend continues to accelerate, that's a difficult balancing act in the long run. The company is entering the digital video streaming market a bit late, leaving the nascent streaming operations to make up for a steady decline in the traditional cable TV market.
AMC's November pain simply continued a negative trend across the last four quarters. The stock has now lost 34% of its value in 52 weeks. AMC could be a strong turnaround story starting from these low prices, but there's not much evidence for an improving business trend here. Take a gamble on this risky stock at your own peril.