As the meme stock frenzy took the world by surprise this year, several WallStreetBets (WSB) stocks soared based solely on investors’ sentiment, absent requisite fundamentals. One such stock is AMC Entertainment (NYSE:AMC). Its shares look overvalued at their current price level. So, we think instead of AMC, it could be wise to bet instead on quality meme stocks Caterpillar (CAT), Micron Technology (NASDAQ:MU), and Gartner (NYSE:IT). So, let’s discuss these names.Theatrical exhibitor AMC Entertainment (AMCAMC) reported its highest December night opening ever, with a record 1.1 million people attending the ‘Spider-Man: No Way Home’ premiere on December 17. The Leawood, Kans.-based company’s non-GAAP total revenues for the third quarter, ended September 30, 2021, increased 532.3% year-over-year to $755.60 million. However, its net loss came in at $224.20 million compared to a $905.80 million loss in the year-ago period.
The popular meme stock has gained 1,252.8% year-to-date to close yesterday’s trading session at $28.68. However, it is currently trading 60.5% below its 52-week high of $72.62, which it hit on June 2, 2021. Wall Street analysts expect the stock to hit $8.17 in the near term, which indicates a potential 71.5% decline. AMC’s shares are also trading at an expensive valuation. In terms of forward EV/S and P/S, AMC’s respective 9.98x and 5.91x are higher than the 2.44x and 1.74x industry averages. So, the stock is best avoided now.
While not all meme stocks are good bets, popular meme stocks Caterpillar Inc. (NYSE:CAT), Micron Technology, Inc. (MU), and Gartner, Inc. (IT) possess sound fundamentals. So, instead of AMC, we think it could be wise to scoop up their shares now.