AMC Entertainment Holdings (AMC -1.76%) was one of the companies hardest hit by the coronavirus pandemic. Nearly all of its roughly 1,000 movie theaters had to shut their doors to guests at some point in 2020, cutting off virtually 100% of the theater chain's revenue.  

Now, as states have begun easing restrictions on businesses, roughly 98% of AMC theaters have reopened to the public (although many still operate with restricted seating). Still, moviegoers have not yet flocked back to theaters despite now having the option to do so.

This is partly because movie studios have delayed the release of several potentially high-attendance films and partly because these same studios have been making many of the best film releases available simultaneously on streaming services, which has reduced the urgency to watch must-see movies in a theater. 

When AMC reports first-quarter earnings on Thursday, May 6, investors and potential investors will be keen to see the latest revenue figures to know if there is any reason for renewed hope for this troubled stock.

A stock ticker board with COMEBACK written among the numbers.

AMC was losing $130 million per month during shutdowns. Image source: Getty Images.

Stopping the bleeding 

Overall revenue likely remained depressed in the most recent quarter. Although many locations were allowed to reopen throughout the quarter and 2021, AMC's most lucrative markets in New York City and Los Angeles only very recently started reopening and with reduced capacity. Now that major markets are reopened and more than 100 million Americans have been fully vaccinated, movie studios are incentivized to resume releasing films to the big screen. 

Walt Disney(DIS -1.08%)will premiere Cruella, a live-action prequel to the 101 Dalmations animated film, at the end of May and a Marvel superhero film Black Widow on July 9. Each has the potential to bring in hundreds of millions in much-needed revenue for AMC. However, both will also be released for a premium subscription price on Disney+. Other studios are following suit, and the entertainment industry is optimistic about the upcoming summer movie season.

During the closures, AMC was losing an estimated $130 million per month in cash. Therefore, it'll be important for AMC to generate enough revenue to offset its expenses to be at least cash flow neutral. That way, it won't be in danger of running out of cash or needing to raise additional capital to sustain itself. 

Once it reaches that level, its prospects should improve. There's no telling how many people will return to movie theaters in the aftermath of the pandemic or when economic activity will fully return to normalcy. However, you can be certain that any future level is likely to be higher than current attendance. If AMC can at least reach that cash-neutral position, it has more room to negotiate and perhaps buy itself more time to realize a return to normalcy. 

For that reason, revenue is the most important figure you'll want to look at when AMC reports first-quarter results on Thursday. 

What this could mean for investors 

Analysts on Wall Street expect AMC to report revenue of $153 million and a loss per share of $1.26. If it hits the revenue expectations of Wall Street, it would still be a decrease of 84% from the same quarter last year.

Share prices of AMC stock are up a whopping 342% year to date, mostly because of its role in a short-squeeze trading frenzy that occurred in late January. Investors looking for an entertainment stock that can benefit as economies reopen will be better served if they wait for the price of AMC to pull back substantially before starting a position.