Earnings Beat: AMC Networks Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

AMC Networks Inc. (NASDAQ:AMCX) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 2.9% to hit US$600m. AMC Networks also reported a statutory profit of US$0.91, which was an impressive 104% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from seven analysts covering AMC Networks is for revenues of US$2.28b in 2025. This implies a perceptible 3.0% decline in revenue compared to the last 12 months. AMC Networks is also expected to turn profitable, with statutory earnings of US$1.70 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.28b and earnings per share (EPS) of US$1.87 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

View our latest analysis for AMC Networks

The average price target fell 20% to US$6.64, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on AMC Networks, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$4.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 3.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 5.8% decline in revenue until the end of 2025. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 3.1% annually. So while a broad number of companies are forecast to grow, unfortunately AMC Networks is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that AMC Networks' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of AMC Networks' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple AMC Networks analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - AMC Networks has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.