Meme stock fans and bargain hunters look ahead to AMC Entertainment Inc, Coinbase Global Inc and Peloton Interactive earnings

With a quiet day in London on Tuesday, more UK investors than usual might be turning across the Atlantic for some interesting news. 

This evening it’s the turn of AMC Entertainment Inc, where the shares have tumbled 76% from their meme stock peak but are still almost 500% higher than at the start of 2021 and remain prone to significant bouts of meme-adjacent volatility.

The cinema owner, which this year also diversified with a US$27.9mln investment in a 22% stake of junior gold miner Hycroft.

AMC’s core business is still a long way from returning to profit but the pandemic has lowered expectations for the movie theatre chain, meaning if it beats first-quarter expected losses of US$0.55 per share there could be some encouragement taken.

At the previous earnings report, CEO Adam Aron said AMC was “no longer on its heels”, as net losses for the fourth quarter of 2021 shrunk to US$134.4mln from the US$946.1mln lockdown-induced loss in 2020, with a net loss per share of US$0.26.

On the adjusted EBITDA level the company was in the black for the first time in two years, with operating cash of US$220mln generated as record-breaking Spiderman: No Way Home netted strong attendance.

Spiderman has continued to do well, while the first quarter’s biggest box office draw has been the new Batman.    

On Tuesday, US earnings are due from CoinBase, Electronic Arts, Fox Corp, Peloton, Roblox, and Warner Music.

Coinbase Global Inc (NASDAQ:COIN) beat expectations in its previous quarter as volatility in cryptocurrencies pushed revenues and profits higher.

But the stock has lost almost three-quarters of its value since November’s peaks of almost US$370.

The share price that has been falling “over concerns over the company’s wider valuation as well as cryptocurrencies that have also started to come under pressure from their recent peaks”, said analyst Michael Hewson at CMC Markets.

“The decline has also been exacerbated by concern over trading volumes as a result of continued weakness in crypto prices along with uncertainty over new regulations.”

The consensus EPS forecast for Coinbase is US$0.20.

Shares in Peloton Interactive (NASDAQ:PTON) Inc have also run out of puff as the lockdown demand has petered out badly, with the company last month raising its subscription prices at the same time as slashing the price of its treadmills and bikes.

This followed a previous quarterly update that saw yet another downgrade, though some bargain-hunting investors are hanging around due to speculation of takeover interest, with the likes of Apple, Amazon, Nike and Disney all linked.

Revenue guidance that stood at US$5.4bn at the end of its first quarter was first trimmed to a range of US$4.4bn to US$4.8bn, and then further to US$3.7bn to US$3.8bn.

For the past quarter, revenue is expected to come just below US$1bn, with an EBITDA loss of between US$125m to US$140m.

Boss John Foley moved to the position of executive chairman, with former Netflix finance chief Barry McCarthy taking the CEO role, while the company cuts 2,800 jobs in an attempt to make savings of US$800mln and restructures the business.

While McCarthy has ruled out a sale, “there may come a point where shareholders throw in the towel and invite one,” said Hewson. 

Losses are expected to come in at $0.81 per share.    

 

Significant announcements expected on Tuesday 10th

Finals: FD Technologies PLC, Shanta Gold PLC, Skillcast Group PLC, Trellus Health PLC 

Interims: Treatt PLC 

AGMs: Albion Development VCT PLC, Centamin PLC, Direct Line Insurance Group PLC, Fidelity European Trust PLC, Gresham Technologies, HG Capital Trust PLC, IWG PLC, Just Group PLC, MacFarlane Group PLC, Sancus Lending Group Limited, Temple Bar Investment Trust PLC 

Economic data: Wholesale Inventories (US)