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Should Investors Retain America Movil (AMX) in their Portfolio?
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America Movil (AMX - Free Report) is expected to benefit from increasing broadband client base and wireless subscriber additions. Synergies from recent acquisitions bode well.
The company’s 2022 and 2023 earnings are expected to improve 21.6% and 3.8%, respectively, year over year.
The stock is down 15.4% from its 52-week high level of $22.65 on May 27, 2022, making it relatively affordable for investors. The company’s shares are up 4.2% over a year against the 11.3% decline recorded by the Zacks sub-industry.
Image Source: Zacks Investment Research
Moreover, the company has an impressive VGM Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors That Augur Well
America Movil provides integrated telecommunications services in Latin America. It offers enhanced communications solutions in 25 countries in Latin America, the United States and Central and Eastern Europe.
The company is expected to benefit from increasing broadband client base and wireless subscriber additions. In the last quarter, it gained 3.1 million wireless subscribers, which included 1.8 million postpaid subscribers.
Also, the company is benefitting from recent acquisitions of Brazil’s Oi and Nextel Brazil from NII Holdings. Brazil acquisitions can help the company to expand its presence in Brazil. The company had 306 million wireless subscribers after adding 12.9 million subscribers from the buyout of Oi in Brazil.
The acquisition of Nextel Brazil was aimed at expanding the company’s subscriber base in the country. It also helps the company to strengthen its mobile network capacity, spectrum portfolio and market position in the postpaid segment.
A Few Headwinds
Wall Street is facing extreme volatility due to several macroeconomic factors, such as rising inflation and interest rate hikes by Federal Reserve, the ongoing Russia-Ukraine war, increased crude oil prices and lingering supply-chain woes that have made investors uncertain about the global economic recovery.
Moreover, the company’s last reported quarterly performance was negatively affected by higher comprehensive financing costs. The company had a comprehensive financing cost of MxP18.1 billion against the year-earlier quarter’s comprehensive financing income of MxP17.1 billion.
AMX reported a net income per ADR of 21 cents in second-quarter 2022, down from 64 cents reported in the prior-year quarter.
Net income in the June quarter was Mex$13,683 million or Mex$0.21 per share compared with Mex$42,815 million or Mex$0.65 per share in the year-ago quarter. The downside was primarily caused by higher comprehensive financing costs in the reported quarter.
Stiff competition from AT&T’s entry into the Mexican telecom industry and Vivo in Brazil is an added headwind.
AMX also has a highly leveraged balance sheet which means it is under pressure to meet debt obligations. As of Jun 30, 2022, America Movil had MxP150,756 million in cash, marketable securities and other short-term investments with MxP439,009 million of long-term debt for this Zacks Rank #3 (Hold) stock.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have jumped 18.8% in the past year.
The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 6% in the past 60 days.
Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 5.2% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.03 per share, increasing 9.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 40.5% in the past year.
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Should Investors Retain America Movil (AMX) in their Portfolio?
America Movil (AMX - Free Report) is expected to benefit from increasing broadband client base and wireless subscriber additions. Synergies from recent acquisitions bode well.
The company’s 2022 and 2023 earnings are expected to improve 21.6% and 3.8%, respectively, year over year.
The stock is down 15.4% from its 52-week high level of $22.65 on May 27, 2022, making it relatively affordable for investors. The company’s shares are up 4.2% over a year against the 11.3% decline recorded by the Zacks sub-industry.
Image Source: Zacks Investment Research
Moreover, the company has an impressive VGM Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
Factors That Augur Well
America Movil provides integrated telecommunications services in Latin America. It offers enhanced communications solutions in 25 countries in Latin America, the United States and Central and Eastern Europe.
The company is expected to benefit from increasing broadband client base and wireless subscriber additions. In the last quarter, it gained 3.1 million wireless subscribers, which included 1.8 million postpaid subscribers.
Also, the company is benefitting from recent acquisitions of Brazil’s Oi and Nextel Brazil from NII Holdings. Brazil acquisitions can help the company to expand its presence in Brazil. The company had 306 million wireless subscribers after adding 12.9 million subscribers from the buyout of Oi in Brazil.
The acquisition of Nextel Brazil was aimed at expanding the company’s subscriber base in the country. It also helps the company to strengthen its mobile network capacity, spectrum portfolio and market position in the postpaid segment.
A Few Headwinds
Wall Street is facing extreme volatility due to several macroeconomic factors, such as rising inflation and interest rate hikes by Federal Reserve, the ongoing Russia-Ukraine war, increased crude oil prices and lingering supply-chain woes that have made investors uncertain about the global economic recovery.
Moreover, the company’s last reported quarterly performance was negatively affected by higher comprehensive financing costs. The company had a comprehensive financing cost of MxP18.1 billion against the year-earlier quarter’s comprehensive financing income of MxP17.1 billion.
AMX reported a net income per ADR of 21 cents in second-quarter 2022, down from 64 cents reported in the prior-year quarter.
Net income in the June quarter was Mex$13,683 million or Mex$0.21 per share compared with Mex$42,815 million or Mex$0.65 per share in the year-ago quarter. The downside was primarily caused by higher comprehensive financing costs in the reported quarter.
Stiff competition from AT&T’s entry into the Mexican telecom industry and Vivo in Brazil is an added headwind.
AMX also has a highly leveraged balance sheet which means it is under pressure to meet debt obligations. As of Jun 30, 2022, America Movil had MxP150,756 million in cash, marketable securities and other short-term investments with MxP439,009 million of long-term debt for this Zacks Rank #3 (Hold) stock.
Stocks to Consider
Some better-ranked stocks from the broader technology space are Cadence Design Systems (CDNS - Free Report) , Badger Meter (BMI - Free Report) and Arista Networks (ANET - Free Report) . Cadence Design Systems, Badger Meter and Arista Networks (ANET - Free Report) each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have jumped 18.8% in the past year.
The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 6% in the past 60 days.
Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 5.2% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.03 per share, increasing 9.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 40.5% in the past year.