What is AMC's Intrinsic value?

AMC Entertainment Holdings Inc (AMC) Intrinsic Value Analysis

Executive Summary

As of June 22, 2025, AMC Entertainment Holdings Inc's estimated intrinsic value ranges from $34.58 to $34.58 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $34.58 +1048.9%

Is AMC Entertainment Holdings Inc (AMC) undervalued or overvalued?

With the current market price at $3.01, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate AMC Entertainment Holdings Inc's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.63 1.38
Cost of equity 6.8% 12.6%
Cost of debt 7.1% 23.9%
Tax rate 0.7% 0.8%
Debt/Equity ratio 3.17 3.17
After-tax WACC 7.0% 21.0%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $1,956M
Discount Rate (WACC) 21.0% - 7.0%
Enterprise Value $9,311M - $28,066M
Net Debt $3,710M
Equity Value $5,601M - $24,357M
Outstanding Shares 433M
Fair Value $13 - $56
Selected Fair Value $34.58

Key Financial Metrics

Metric Value
Market Capitalization $1304M
Enterprise Value $5013M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 12.60
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) -64.38%
Debt-to-Equity Ratio 3.17

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Earnings Power Value 100% $3.46
Weighted Average 100% $34.58

Investment Conclusion

Based on our comprehensive valuation analysis, AMC Entertainment Holdings Inc's weighted average intrinsic value is $34.58, which is approximately 1048.9% above the current market price of $3.01.

Key investment considerations:

  • Strong projected earnings growth (-8% to 1% margin)
  • Consistent cash flow generation

Given these factors, we believe AMC Entertainment Holdings Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.