Should You Buy AMC Entertainment Holdings (AMC) Stock While It's Below $3?

AMC Entertainment (NYSE: AMC) is an interesting stock. For a while, in 2021, it was a "meme stock," often in the news and surging more than 1,100% that year to more than $600 per share. The next years were different, with shares crashing 85%, 85%, 35%, and 61% in 2022, 2023, 2024, and 2025, respectively. Altogether, that's more than a 99% decline. Ouch!

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So far, 2026 has been quite different, with shares up about 63% (as of Sept. 4). Still, they were recently trading for $2.67 apiece. In other words, AMC Entertainment's shares are firmly in penny-stock territory. Should you buy shares now, while they're below $3? Maybe.

Penny stocks are notoriously volatile and risky, often tied to young, unproven companies, and occasionally hyped online. They're generally to be avoided. But AMC Entertainment, while definitely not a no-brainer, blue chip stock, is not a typical penny stock. Its market value was recently $2.4 billion, for example. Its last earnings report, for its second quarter, featured revenue of $1.6 billion, up 14% year over year.

So -- should you buy into AMC Entertainment? Here are some reasons you might:

• Movie theaters are having a great year, with summer ticket sales up 26% over last year and above most recent summers.
• AMC seems to have its mojo back, with Q2 also featuring adjusted earnings in the black, not the red.
• The stock's valuation arguably looks reasonable, with a low price-to-sales ratio of 0.28, below the five-year average of 0.31.

However, keep in mind:

• Other movie stocks may be better buys, with lower valuations.
• AMC doesn't have a solid track record of profits.
• It doesn't pay a dividend.
• The company has issued many more shares, diluting the value of existing shares.
• It's carrying a lot of debt.

Overall, I'm taking a pass. But dig deeper, if you're intrigued, and see what you think.

Selena Maranjian 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.