AMC Entertainment (NYSE:AMC) fans may still hope for a post-pandemic recovery for the movie theater chain, but streaming stocks better than AMC are likely the potentially more profitable wager.
The reasons for this are twofold. Firstly, prospects are mixed for the U.S. box office in 2024.
Unlike a continuous rebound to pre-Covid levels, forecasts indicate a potential decline in total receipts compared to 2023.
Secondly, even if movie theaters experience an unforeseen renaissance in popularity, this may not necessarily lead to a turnaround for the one-time meme stock.
As previously argued, AMC’s dilution spiral is expected to continue weighing on its stock price performance.
In contrast, let’s delve into three streaming stocks outshining AMC, each seizing the future of entertainment.
Let’s walk through each one and uncover why they present solid buying opportunities at current prices.
Walt Disney (DIS)
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The market has recently shown renewed interest in Walt Disney (NYSE:DIS). While a proxy fight for control of Disney’s board may play a part, another significant factor is likely at play.
This factor is the heightened confidence in the company’s streaming strategy. Disney’s latest guidance updates reveal an anticipated profitability for its streaming unit by the end of the current fiscal year (ending September 2024).
Despite DIS stock surging on this promising news, there may still be untapped potential, as suggested by sell-side earnings projections. Earnings are expected to climb by 17.1% next fiscal year, driven by streaming growth and cost-saving measures. The upper end of FY2025 forecasts envisages a nearly 40% surge in Disney’s bottom line.
Fox (FOX)
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One might wonder, is Fox (NYSE:FOX) truly among the streaming stocks surpassing AMC?
Despite primarily holding assets in the Fox Broadcasting network, owned and operated stations, and cable channels like Fox News and Fox Sports, Fox has significantly increased its streaming presence in recent years. In 2020, the company acquired ad-supported streamer Tubi for $440 million.
Since then, Fox has substantially nurtured the business. Last year, it turned down a $2 billion offer for the platform. More recently, Fox, together with Disney and Warner Bros Discovery (NASDAQ:WBD), is launching a sports streaming joint project.
Should this venture succeed, alongside Tubi’s continued growth, FOX, trading at a mere 8.9 times forward earnings, could see a significant upward reevaluation by the market.
Paramount Global (PARA)
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It’s common knowledge that Paramount Global (NASDAQ:PARA) is currently considered “in play,” poised as a potential acquisition target.
Both strategic and financial buyers are eyeing the company for its valuable content library and streaming platform potential.
Apollo Global Management (NYSE:APO) recently tabled an $11 billion offer solely for the company’s film and TV studio. If a bidding war erupts, shareholders of PARA stock could be bought out at a significant premium to the current trading price.
Even without a complete acquisition, another profitable catalyst could emerge. Reports suggest a potential transaction favored by Paramount Global’s controlling shareholder, which could result in significant management changes.
With a fresh management team, Paramount might replicate Disney’s streaming success, potentially leading to a substantial share price rebound.
On the day of publication, Thomas Niel did not have any positions in the securities mentioned. The views in this article are attributed to the writer, adhering to the InvestorPlace.com Publishing Guidelines.
