I have purchased AMC long options calls with an expiration date of June 23rd and July 7th. The strike price for both contracts is $4.50. I believe that AMC is undervalued and that the stock price will increase after earnings are released on June 23rd.
AMC is a leading movie theater chain with a strong brand and a loyal customer base. The company has been struggling in recent years due to the COVID-19 pandemic, but it is beginning to recover. In the first quarter of 2023, AMC's revenue increased by 83% year-over-year. The company also generated positive earnings for the first time since 2019.
I believe that AMC's earnings report on June 23rd will be positive. I expect the company to report revenue of $1.2 billion and earnings per share of $0.15. If these numbers are met or exceeded, I believe that the stock price will increase significantly.
I am bullish on AMC and I believe that the stock price could reach $6.00 by the end of July. If the stock price does reach this level, I will sell my options contracts for a profit.
Risks
There are a few risks associated with this trade. First, AMC's earnings report could disappoint. If the company reports revenue or earnings below expectations, the stock price could decline. Second, the overall market could decline, which could also impact the price of AMC stock. Third, the options contracts could expire worthless if the stock price does not reach $4.50 by the expiration date.
Conclusion
I believe that the risks associated with this trade are outweighed by the potential rewards. I am bullish on AMC and I believe that the stock price could reach $6.00 by the end of July. If this happens, I will sell my options contracts for a profit.