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AMC Networks Inc. (AMCX) - free report >>
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AMC Networks Inc. (AMCX) - free report >>
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Bear of the Day: AMC Networks (AMCX)
You’ve heard me say it before, when the fundamentals break down and the charts look ugly, it’s time to head for the exits. Today’s Bear of the Day is one of those once-promising names that’s stuck in the quicksand of a rapidly changing media landscape. I’m talking about AMC Networks ((AMCX - Free Report) ) and unfortunately, this stock is looking more like reruns of “The Walking Dead” than a fresh new season.
AMC Networks, the cable TV player behind hit shows like Breaking Bad, Mad Men, and The Walking Dead, is struggling to adapt to a world where streaming is king and traditional linear TV is rapidly losing relevance. The company’s revenue base is still heavily reliant on cable distribution fees and ad dollars, two sources that are drying up faster than a zombie apocalypse water supply. A classic case of cord-cutting carnage.
Let’s face it, the legacy media just isn’t what it used to be. Consumers are cutting the cord, advertisers are shifting to digital, and new content is being gobbled up by streaming giants with deeper pockets and global distribution.
The Zacks Rank system doesn’t lie. When analysts start slashing their earnings estimates, that’s your cue to pay attention. And with AMC Networks, it’s not just a small trim, we’re talking about a full-on buzz cut.
Over the last 90 days, analysts have taken the hatchet to AMCX’s earnings outlook. The Zacks Consensus Estimate for the current year has dropped from $3.15 per share to just $2.62. Next year isn’t looking any better either, with estimates sliding from $3.10 to $2.43. That means that this year’s 32% contraction in earnings is forecast to slide another 7.35% next year. With no fewer than 3 analysts chopping at earnings, that’s the reason why the stock is currently a Zacks Rank #5 (Strong Sell).
The Broadcast Radio and Television industry is surprisingly in the Top 23% of our Zacks Industry Rank. There are a couple of names within the industry that are not only in the good graces of our Zacks Rank, but are Zacks Rank #1 (Strong Buy) stocks. These include Fox ((FOX - Free Report) ) and TENGA ((TGNA - Free Report) ).