Intrinsic value of AMC Entertainment Holding - AMC

Previous Close

$14.40

  Intrinsic Value

$154.52

stock screener

  Rating & Target

str. buy

+973%

Previous close

$14.40

 
Intrinsic value

$154.52

 
Up/down potential

+973%

 
Rating

str. buy

We calculate the intrinsic value of AMC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.81
  51.20
  46.58
  42.42
  38.68
  35.31
  32.28
  29.55
  27.10
  24.89
  22.90
  21.11
  19.50
  18.05
  16.74
  15.57
  14.51
  13.56
  12.70
  11.93
  11.24
  10.62
  10.06
  9.55
  9.09
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
Revenue, $m
  3,236
  4,893
  7,172
  10,214
  14,165
  19,167
  25,355
  32,848
  41,748
  52,139
  64,078
  77,604
  92,735
  109,472
  127,801
  147,699
  169,133
  192,069
  216,471
  242,306
  269,543
  298,160
  328,141
  359,477
  392,171
  426,231
  461,680
  498,545
  536,866
  576,690
  618,073
Variable operating expenses, $m
 
  4,315
  6,141
  8,580
  11,746
  15,755
  20,714
  26,719
  33,853
  42,180
  51,749
  62,196
  74,324
  87,738
  102,428
  118,375
  135,554
  153,936
  173,493
  194,199
  216,029
  238,964
  262,992
  288,107
  314,309
  341,608
  370,018
  399,564
  430,277
  462,194
  495,362
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,023
  4,315
  6,141
  8,580
  11,746
  15,755
  20,714
  26,719
  33,853
  42,180
  51,749
  62,196
  74,324
  87,738
  102,428
  118,375
  135,554
  153,936
  173,493
  194,199
  216,029
  238,964
  262,992
  288,107
  314,309
  341,608
  370,018
  399,564
  430,277
  462,194
  495,362
Operating income, $m
  213
  578
  1,031
  1,635
  2,419
  3,412
  4,641
  6,128
  7,895
  9,958
  12,329
  15,407
  18,412
  21,734
  25,374
  29,324
  33,580
  38,133
  42,978
  48,107
  53,515
  59,196
  65,149
  71,370
  77,861
  84,624
  91,661
  98,981
  106,589
  114,495
  122,712
EBITDA, $m
  481
  1,153
  1,690
  2,407
  3,338
  4,517
  5,975
  7,740
  9,838
  12,286
  15,099
  18,287
  21,852
  25,796
  30,115
  34,804
  39,855
  45,260
  51,010
  57,097
  63,516
  70,259
  77,324
  84,708
  92,412
  100,438
  108,791
  117,478
  126,508
  135,892
  145,644
Interest expense (income), $m
  105
  160
  277
  439
  654
  934
  1,288
  1,726
  2,257
  2,887
  3,623
  4,468
  5,426
  6,498
  7,683
  8,981
  10,390
  11,908
  13,532
  15,260
  17,090
  19,019
  21,045
  23,168
  25,388
  27,703
  30,115
  32,625
  35,236
  37,949
  40,770
Earnings before tax, $m
  150
  418
  753
  1,196
  1,765
  2,478
  3,352
  4,402
  5,638
  7,071
  8,706
  10,939
  12,985
  15,237
  17,690
  20,343
  23,189
  26,225
  29,446
  32,847
  36,425
  40,178
  44,103
  48,202
  52,474
  56,921
  61,547
  66,355
  71,353
  76,546
  81,942
Tax expense, $m
  38
  113
  203
  323
  477
  669
  905
  1,189
  1,522
  1,909
  2,351
  2,953
  3,506
  4,114
  4,776
  5,493
  6,261
  7,081
  7,950
  8,869
  9,835
  10,848
  11,908
  13,014
  14,168
  15,369
  16,618
  17,916
  19,265
  20,667
  22,124
Net income, $m
  112
  305
  550
  873
  1,288
  1,809
  2,447
  3,213
  4,116
  5,162
  6,355
  7,985
  9,479
  11,123
  12,914
  14,850
  16,928
  19,144
  21,495
  23,978
  26,590
  29,330
  32,196
  35,187
  38,306
  41,552
  44,929
  48,439
  52,088
  55,878
  59,818

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  252
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,642
  12,676
  18,580
  26,462
  36,698
  49,656
  65,686
  85,097
  108,156
  135,074
  166,004
  201,046
  240,246
  283,606
  331,092
  382,640
  438,169
  497,589
  560,807
  627,736
  698,299
  772,436
  850,106
  931,288
  1,015,986
  1,104,226
  1,196,061
  1,291,567
  1,390,844
  1,494,015
  1,601,226
Adjusted assets (=assets-cash), $m
  8,390
  12,676
  18,580
  26,462
  36,698
  49,656
  65,686
  85,097
  108,156
  135,074
  166,004
  201,046
  240,246
  283,606
  331,092
  382,640
  438,169
  497,589
  560,807
  627,736
  698,299
  772,436
  850,106
  931,288
  1,015,986
  1,104,226
  1,196,061
  1,291,567
  1,390,844
  1,494,015
  1,601,226
Revenue / Adjusted assets
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
Average production assets, $m
  2,568
  3,885
  5,694
  8,110
  11,247
  15,219
  20,132
  26,081
  33,148
  41,398
  50,878
  61,617
  73,632
  86,921
  101,474
  117,273
  134,292
  152,503
  171,878
  192,391
  214,018
  236,739
  260,544
  285,425
  311,383
  338,428
  366,574
  395,845
  426,271
  457,892
  490,750
Working capital, $m
  -505
  -1,023
  -1,499
  -2,135
  -2,961
  -4,006
  -5,299
  -6,865
  -8,725
  -10,897
  -13,392
  -16,219
  -19,382
  -22,880
  -26,711
  -30,869
  -35,349
  -40,142
  -45,243
  -50,642
  -56,335
  -62,316
  -68,581
  -75,131
  -81,964
  -89,082
  -96,491
  -104,196
  -112,205
  -120,528
  -129,177
Total debt, $m
  4,653
  7,922
  12,533
  18,689
  26,683
  36,804
  49,322
  64,483
  82,492
  103,515
  127,671
  155,039
  185,654
  219,519
  256,605
  296,864
  340,232
  386,639
  436,012
  488,284
  543,394
  601,295
  661,955
  725,358
  791,507
  860,423
  932,146
  1,006,736
  1,084,271
  1,164,847
  1,248,580
Total liabilities, $m
  6,631
  9,900
  14,511
  20,667
  28,661
  38,782
  51,300
  66,461
  84,470
  105,493
  129,649
  157,017
  187,632
  221,497
  258,583
  298,842
  342,210
  388,617
  437,990
  490,262
  545,372
  603,273
  663,933
  727,336
  793,485
  862,401
  934,124
  1,008,714
  1,086,249
  1,166,825
  1,250,558
Total equity, $m
  2,011
  2,776
  4,069
  5,795
  8,037
  10,875
  14,385
  18,636
  23,686
  29,581
  36,355
  44,029
  52,614
  62,110
  72,509
  83,798
  95,959
  108,972
  122,817
  137,474
  152,928
  169,164
  186,173
  203,952
  222,501
  241,826
  261,937
  282,853
  304,595
  327,189
  350,669
Total liabilities and equity, $m
  8,642
  12,676
  18,580
  26,462
  36,698
  49,657
  65,685
  85,097
  108,156
  135,074
  166,004
  201,046
  240,246
  283,607
  331,092
  382,640
  438,169
  497,589
  560,807
  627,736
  698,300
  772,437
  850,106
  931,288
  1,015,986
  1,104,227
  1,196,061
  1,291,567
  1,390,844
  1,494,014
  1,601,227
Debt-to-equity ratio
  2.314
  2.850
  3.080
  3.220
  3.320
  3.380
  3.430
  3.460
  3.480
  3.500
  3.510
  3.520
  3.530
  3.530
  3.540
  3.540
  3.550
  3.550
  3.550
  3.550
  3.550
  3.550
  3.560
  3.560
  3.560
  3.560
  3.560
  3.560
  3.560
  3.560
  3.560
Adjusted equity ratio
  0.210
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219
  0.219

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  112
  305
  550
  873
  1,288
  1,809
  2,447
  3,213
  4,116
  5,162
  6,355
  7,985
  9,479
  11,123
  12,914
  14,850
  16,928
  19,144
  21,495
  23,978
  26,590
  29,330
  32,196
  35,187
  38,306
  41,552
  44,929
  48,439
  52,088
  55,878
  59,818
Depreciation, amort., depletion, $m
  268
  575
  659
  772
  919
  1,104
  1,334
  1,612
  1,942
  2,328
  2,771
  2,879
  3,441
  4,062
  4,742
  5,480
  6,275
  7,126
  8,032
  8,990
  10,001
  11,063
  12,175
  13,338
  14,551
  15,814
  17,130
  18,497
  19,919
  21,397
  22,932
Funds from operations, $m
  349
  880
  1,209
  1,645
  2,207
  2,914
  3,781
  4,825
  6,058
  7,490
  9,126
  10,865
  12,920
  15,184
  17,656
  20,330
  23,204
  26,271
  29,527
  32,968
  36,591
  40,392
  44,370
  48,525
  52,856
  57,367
  62,059
  66,937
  72,007
  77,275
  82,750
Change in working capital, $m
  -83
  -346
  -476
  -636
  -826
  -1,045
  -1,293
  -1,566
  -1,860
  -2,172
  -2,495
  -2,827
  -3,162
  -3,498
  -3,831
  -4,159
  -4,480
  -4,794
  -5,100
  -5,399
  -5,693
  -5,981
  -6,266
  -6,549
  -6,833
  -7,119
  -7,409
  -7,705
  -8,009
  -8,323
  -8,649
Cash from operations, $m
  432
  1,226
  1,686
  2,281
  3,033
  3,959
  5,074
  6,391
  7,919
  9,661
  11,621
  13,692
  16,082
  18,682
  21,487
  24,489
  27,683
  31,064
  34,627
  38,368
  42,284
  46,373
  50,636
  55,074
  59,689
  64,485
  69,467
  74,642
  80,016
  85,598
  91,399
Maintenance CAPEX, $m
  0
  -120
  -182
  -266
  -379
  -526
  -711
  -941
  -1,219
  -1,549
  -1,934
  -2,377
  -2,879
  -3,441
  -4,062
  -4,742
  -5,480
  -6,275
  -7,126
  -8,032
  -8,990
  -10,001
  -11,063
  -12,175
  -13,338
  -14,551
  -15,814
  -17,130
  -18,497
  -19,919
  -21,397
New CAPEX, $m
  -422
  -1,317
  -1,810
  -2,416
  -3,137
  -3,972
  -4,913
  -5,949
  -7,067
  -8,250
  -9,480
  -10,740
  -12,014
  -13,289
  -14,554
  -15,799
  -17,019
  -18,211
  -19,375
  -20,513
  -21,627
  -22,722
  -23,805
  -24,881
  -25,958
  -27,044
  -28,146
  -29,271
  -30,427
  -31,620
  -32,859
Cash from investing activities, $m
  -1,355
  -1,437
  -1,992
  -2,682
  -3,516
  -4,498
  -5,624
  -6,890
  -8,286
  -9,799
  -11,414
  -13,117
  -14,893
  -16,730
  -18,616
  -20,541
  -22,499
  -24,486
  -26,501
  -28,545
  -30,617
  -32,723
  -34,868
  -37,056
  -39,296
  -41,595
  -43,960
  -46,401
  -48,924
  -51,539
  -54,256
Free cash flow, $m
  -923
  -211
  -305
  -401
  -483
  -538
  -549
  -499
  -367
  -138
  207
  574
  1,189
  1,953
  2,871
  3,948
  5,184
  6,578
  8,125
  9,823
  11,667
  13,651
  15,769
  18,018
  20,393
  22,890
  25,507
  28,241
  31,092
  34,059
  37,144
Issuance/(repayment) of debt, $m
  1,065
  3,350
  4,611
  6,156
  7,994
  10,121
  12,519
  15,161
  18,009
  21,023
  24,157
  27,368
  30,615
  33,864
  37,086
  40,259
  43,368
  46,407
  49,373
  52,271
  55,110
  57,901
  60,660
  63,403
  66,149
  68,916
  71,723
  74,590
  77,535
  80,576
  83,732
Issuance/(repurchase) of shares, $m
  0
  631
  743
  853
  953
  1,029
  1,063
  1,038
  934
  733
  419
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  998
  3,981
  5,354
  7,009
  8,947
  11,150
  13,582
  16,199
  18,943
  21,756
  24,576
  27,368
  30,615
  33,864
  37,086
  40,259
  43,368
  46,407
  49,373
  52,271
  55,110
  57,901
  60,660
  63,403
  66,149
  68,916
  71,723
  74,590
  77,535
  80,576
  83,732
Total cash flow (excl. dividends), $m
  76
  3,770
  5,049
  6,608
  8,464
  10,611
  13,033
  15,700
  18,576
  21,618
  24,782
  27,942
  31,804
  35,817
  39,957
  44,207
  48,553
  52,985
  57,499
  62,095
  66,777
  71,552
  76,429
  81,421
  86,542
  91,806
  97,230
  102,831
  108,627
  114,636
  120,876
Retained Cash Flow (-), $m
  -471
  -936
  -1,293
  -1,726
  -2,242
  -2,838
  -3,510
  -4,251
  -5,050
  -5,895
  -6,774
  -7,674
  -8,585
  -9,496
  -10,399
  -11,289
  -12,161
  -13,013
  -13,845
  -14,657
  -15,453
  -16,236
  -17,010
  -17,779
  -18,549
  -19,325
  -20,112
  -20,916
  -21,742
  -22,594
  -23,479
Prev. year cash balance distribution, $m
 
  171
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,005
  3,756
  4,882
  6,223
  7,773
  9,522
  11,449
  13,526
  15,723
  18,009
  20,268
  23,219
  26,321
  29,558
  32,918
  36,392
  39,972
  43,654
  47,437
  51,323
  55,316
  59,420
  63,643
  67,993
  72,481
  77,118
  81,915
  86,885
  92,041
  97,397
Discount rate, %
 
  10.30
  10.82
  11.36
  11.92
  12.52
  13.15
  13.80
  14.49
  15.22
  15.98
  16.78
  17.62
  18.50
  19.42
  20.39
  21.41
  22.48
  23.61
  24.79
  26.03
  27.33
  28.70
  30.13
  31.64
  33.22
  34.88
  36.62
  38.45
  40.38
  42.40
PV of cash for distribution, $m
 
  2,724
  3,059
  3,536
  3,965
  4,310
  4,538
  4,631
  4,581
  4,394
  4,090
  3,680
  3,313
  2,898
  2,463
  2,034
  1,632
  1,272
  962
  706
  502
  346
  231
  149
  93
  56
  32
  18
  10
  5
  2
Current shareholders' claim on cash, %
  100
  72.6
  56.1
  45.6
  38.7
  33.9
  30.6
  28.4
  26.9
  26.0
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6
  25.6

AMC Entertainment Holdings, Inc. is a holding company. The Company, through its subsidiaries, including AMC Entertainment Inc. (AMCE), American Multi-Cinema, Inc. (OpCo) and its subsidiaries, is engaged in the theatrical exhibition business. It operates through theatrical exhibition operations segment. It licenses first-run motion pictures from distributors owned by film production companies and from independent distributors. The Company also offers a range of food and beverage items, which include popcorn; soft drinks; candy; hot dogs; specialty drinks, including beers, wine and mixed drinks, and made to order hot foods, including menu choices, such as curly fries, chicken tenders and mozzarella sticks. It operates over 900 theatres with approximately 10,000 screens globally, including over 661 theatres with approximately 8,200 screens in the United States and over 244 theatres with approximately 2,200 screens in Europe. The Company’s subsidiary also includes Carmike Cinemas, Inc.

FINANCIAL RATIOS  of  AMC Entertainment Holding (AMC)

Valuation Ratios
P/E Ratio 14.2
Price to Sales 0.5
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 3.7
Price to Free Cash Flow 158.5
Growth Rates
Sales Growth Rate 9.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 26.7%
Cap. Spend. - 3 Yr. Gr. Rate 10.1%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 227.3%
Total Debt to Equity 231.4%
Interest Coverage 2
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 3%
Return On Total Capital 2.2%
Ret/ On T. Cap. - 3 Yr. Avg. 2.2%
Return On Equity 6.3%
Return On Equity - 3 Yr. Avg. 5.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 61.9%
Gross Margin - 3 Yr. Avg. 61.4%
EBITDA Margin 16.2%
EBITDA Margin - 3 Yr. Avg. 16.3%
Operating Margin 6.6%
Oper. Margin - 3 Yr. Avg. 7%
Pre-Tax Margin 4.6%
Pre-Tax Margin - 3 Yr. Avg. 4.6%
Net Profit Margin 3.5%
Net Profit Margin - 3 Yr. Avg. 3.1%
Effective Tax Rate 25.3%
Eff/ Tax Rate - 3 Yr. Avg. 32%
Payout Ratio 71.4%

AMC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMC stock intrinsic value calculation we used $3236 million for the last fiscal year's total revenue generated by AMC Entertainment Holding. The default revenue input number comes from 2016 income statement of AMC Entertainment Holding. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AMC stock valuation model: a) initial revenue growth rate of 51.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.3%, whose default value for AMC is calculated based on our internal credit rating of AMC Entertainment Holding, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of AMC Entertainment Holding.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AMC stock the variable cost ratio is equal to 92.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AMC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for AMC Entertainment Holding.

Corporate tax rate of 27% is the nominal tax rate for AMC Entertainment Holding. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AMC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AMC are equal to 79.4%.

Life of production assets of 21.4 years is the average useful life of capital assets used in AMC Entertainment Holding operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AMC is equal to -20.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2011 million for AMC Entertainment Holding - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 127.152 million for AMC Entertainment Holding is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of AMC Entertainment Holding at the current share price and the inputted number of shares is $1.8 billion.

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Financial statements of AMC
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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