Please ensure Javascript is enabled for purposes of website accessibility

Why AMC Stock Rallied Today

By Joe Tenebruso – Updated Nov 1, 2021 at 3:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

People are returning to cinemas in droves.

What happened

Shares of AMC Entertainment (AMC 4.36%) rose on Monday after the theater chain reported positive box office trends. 

As of 3:25 p.m. EDT, AMC's stock price was up more than 4%. 

So what 

AMC said the revenue it generated from admissions in the U.S. last month was the highest since the pandemic began.

"When the final tickets are counted for showtimes tonight, the domestic industry box office for October 2021 is estimated to come in considerably higher than that of any previous month since February of 2020," the company said in a press release.

Additionally, AMC noted that its international admissions revenue also reached pandemic highs.

Person eating popcorn while sitting with other moviegoers in a theater.

Image source: Getty Images.

AMC was forced to close its cinemas in March 2020 due to social distancing measures enacted to slow the spread of COVID-19. When health officials later began to ease those restrictions, AMC was eventually able to reopen its theaters.

Guests have been returning in larger numbers in recent months. October's gains were fueled by strong box office performances of Sony's Venom: Let There Be Carnage and AT&T's Dune

Now what

Although these positive box office trends are certainly good news for AMC and other theater operators, investors should note that October's estimated box office receipts of $637.9 million were still down sharply from the $789.5 million the industry earned in October 2019. Moreover, the roughly $3.1 billion in U.S. box office sales produced so far in 2021 is down about 66% from the same period in 2019. 

AMC thus has a long way to go before it fully recovers from its pandemic-related challenges.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.