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AMC Networks (AMCX) Surges 5.4%: Is This an Indication of Further Gains?

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AMC Networks (AMCX - Free Report) shares ended the last trading session 5.4% higher at $39.19. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.4% loss over the past four weeks.

The increase in share price can be attributed to the continued strength seen in streaming, content licensing and advertising revenues.

AMC Networks is working towards building a strong streaming business and aims to have 9 million paid subscribers by 2021. Increasing engagement levels witnessed across streaming portfolio of Shudder, Sundance Now, AMC+, Acorn TV and ALLBLK bodes well. The company is making investments to boost its portfolio of original programming content to attract more subscribers.

AMC Networks’ international expansion endeavors are also noteworthy. In the last reported quarter, the company’s international and other revenues soared 17% year over year to $130 million.

This owner of cable channels including AMC and IFC is expected to post quarterly earnings of $0.20 per share in its upcoming report, which represents a year-over-year change of -92.7%. Revenues are expected to be $772.92 million, down 0.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For AMC Networks, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on AMCX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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