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Why AMC Entertainment’s (AMC) earnings surprise streak may continue

Are you looking for a stock that has consistently beaten earnings estimates and could be well-positioned to continue that streak in the next quarterly report? AMC Entertainment (AMC), which belongs to the Zacks Leisure and Leisure Services industry, could be a great stock to consider.

This cinema operator has had a nice streak of beating earnings estimates, especially considering the two previous reports. The average surprise for the last two quarters was -17.41%.

AMC Entertainment was expected to post earnings of $2.80 per share for the most recent quarter, but instead reported earnings of $3.15 per share, representing a surprise of 12.50%. The consensus estimate for the prior quarter was $4.66 per share when it actually delivered $5.70 per share, representing a surprise of 22.32%.

Price and EPS surprise

Thanks in part to this history, AMC Entertainment has recently seen favorable earnings estimate revisions. In fact, the stock’s ESP (expected surprise) is positive, which is an excellent indicator of earnings growth, especially when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks in this combination, the number of stocks that beat the consensus could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimates to the Zacks Consensus Estimates for the quarter; The Most Accurate Estimate is the Zacks Consensus version, which is defined in terms of change. The idea is that analysts reviewing their estimates just before an earnings release have the latest information, which could potentially be more accurate than what they and other consensus participants had previously predicted.

AMC Entertainment currently has an Earnings ESP of +-10.05%, which suggests analysts have recently become optimistic about the company’s earnings prospects. This positive Earnings ESP combined with the stock’s Zacks Rank #3 (Hold) indicates that another rally is likely just around the corner. We expect the company’s next earnings report to be published on May 6, 2021.

When earnings ESP turns negative, investors should remember that this will reduce the predictive power of this metric. However, a negative value does not indicate a company’s lack of profits.

Many companies end up beating consensus EPS estimates, though that’s not the only reason their shares are rising. Additionally, some stocks may remain stable even if they fall short of consensus estimates.

For this reason, it is very important to check a company’s earnings ESP before its quarterly release to increase the chances of success. Use our Earnings ESP filter to find the best stocks to buy or sell before they report.

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AMC Entertainment Holdings, Inc. (AMC): Free stock analysis report

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