After a yearlong 85% pullback from its peak price, the stock of AMC Entertainment Holdings (AMC -10.08%) is looking like it's on the mend. The movie theater chain's volatile shares now stand 77% above their May low, and continue to march higher. It might be a sign that the company has finally put the pandemic in the past, an idea supported by raw data.

On the other hand, AMC's biggest problem prior to the advent of COVID-19 is not only still a problem, but is still as big a problem now as it was then.

The good news: Ticket sales are nearing pre-pandemic levels

The pandemic-prompted shutdowns of movie theaters led to a surge in streaming sign-ups, ultimately posing a threat to the theater business -- why pay for an expensive movie ticket when you're paying for access to cost-effective streaming content enjoyable at home? Not that it would have proved an existential crisis, but the trends could have permanently altered the theater business for the worse.

That's not happening, though. The chart below tells the tale. In step with domestic box office revenue, AMC's top line is within sight of levels seen as of 2019, right before COVID-19 began what would evolve into nearly a two-year headwind. The theater chain is winning its fair share of the industry's recovered revenue. Moreover, the company is expected to close the remainder of the gap in 2023 before pushing forward a bit further in 2024. 

AMC Entertainment is recovering from the pandemic, along with the entire movie business.

Data sources: Box Office Mojo, Thomson Reuters. Chart by author. All figures are in millions of dollars.

Such optimism isn't out of line, either. Axios reports that market research outfit Omedia estimates 2023's worldwide box-office take will eclipse 2019's tally, jibing with a forecast from PricewaterhouseCoopers.

The bad news: AMC is losing more money now than it was then

The industry's recovery and AMC's subsequent rebound, however, aren't necessarily reasons to step into the stock.

Yes, the theater business is working its way out of its coronavirus funk and nearing its pre-pandemic results. Just as a reminder, though, AMC was losing money before COVID-19 upended the industry. And those losses came despite access to some heavy-hitting blockbuster films.

Take 2017's loss of $177 million as an example. That was the year Walt Disney's (DIS -2.29%) Star Wars: Episode VIII-The Last Jedi came out, along with Spider-Man: Homecoming and the second Guardians of the Galaxy film.

The company scraped by in 2018, netting $110 million on $5.4 billion worth of revenue, largely on the heels of Black Panther and Avengers: Infinity War. By 2019, though, AMC was back in the red, losing $149 million even with the draw of blockbusters like Avengers: Endgame, Toy Story 4, and the last installment of the Star Wars series.

AMC Entertainment frequently reported losses even prior to the pandemic.

Data source: Thomson Reuters. Chart by author. Net income data is in millions of dollars.

Without a clear explanation of what the theater chain is doing differently now than it was then, there's no assurance the post-COVID recovery means AMC is capable of producing meaningful, consistent profits.

Some investors are cheering the company's foray into non-fungible tokens, selling AMC-branded popcorn outside of theaters, and even an investment in a gold mining stock. These ventures are all outside of the company's wheelhouse, creating a potential distraction that in no way benefits its core business.

Weigh the risks and rewards carefully

AMC Entertainment's fate isn't dependent on just the factors listed above. And the company's future isn't an all-or-nothing matter. Most plausibly, the movie theater chain will figure out a way of plugging into a good-size piece of the film business' rebound, and will likely follow a path somewhere in between the two extremes implied by the two charts above.

But on balance, even the best-case scenario isn't exactly great news for AMC. As was noted, the company was frequently in the red well before COVID-19. We've yet to see a solid plan for how it's going to turn that around, particularly in light of the fact that the pandemic proved such a boon for the streaming alternative.

Even a return to the industry's pre-pandemic norms still isn't enough to lift the theater chain out of trouble. And the prospect of a recession only bolsters the bearish argument.