Should You Buy AMC Entertainment Holdings (AMC) Stock While It's Below $3?
Key Points
AMC is in penny-stock territory, so it warrants extra caution.
There are some green flags, such as improving financial results.
But there are less risky alternatives.
- 10 stocks we like better than AMC Entertainment ›
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.
Should you buy stock in AMC Entertainment right now?
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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.
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