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America Movil (AMX) Gains 20.9% YTD: Will the Trend Last?

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America Movil (AMX - Free Report) witnessed strong momentum this year, with its shares gaining 20.9% year to date compared with the sub-industry’s rise of 11.6%.

The company is the leading provider of 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 has expanded rapidly through acquisitions to become a leading Latin American regional wireless carrier. America Movil offers a vast range of wireless services, including prepaid voice services and wireless data services such as SMS, MMS, group messaging, SMS notification and Internet access.

Zacks Investment Research
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Catalysts Behind the Price Surge

Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #2 (Buy) stock.

The increase in share price is driven by the company’s robust financial performance. The company came up with an impressive performance in first-quarter 2023.

The company reported net income per ADR of 51 cents for first-quarter 2023, up from 47 cents reported in the prior-year quarter. Net income in the March quarter was Mex$30,146 million or Mex$0.48 per share compared with Mex$30,797 million or Mex$0.48 per share in the year-ago quarter. Total quarterly revenues increased 1.7% to Mex$208,926 million owing to solid momentum in the equipment business segment.

The company’s performance benefited from increasing broadband client base and wireless subscriber additions, especially in Brazil, Austria and Colombia. In the last quarter, it gained 1.1 million wireless subscribers, which included 1.9 million post-paid subscribers and net disconnections of 0.8 million in prepaid subscribers. As of Mar 31, 2023, the company had a total of 374.3 million access lines, including 300.9 million wireless subscribers and 73.4 million fixed-line revenue-generating units.

The company aims to grow in other parts of the world by continuing to expand its subscriber base through the development of existing businesses and strategic acquisitions.

The company’s acquisition of Brazil’s Oi and Nextel Brazil from NII Holdings has helped it significantly improve its market shares in Brazil. In the last reported quarter, the company added 944,000 post-paid subscribers from Brazil.

Apart from that, the sale of the cellular towers located in the Dominican Republic and Peru to Sitios Latinoamerica will help the company increase shareholder value and lower debt. In the last reported quarter, the company’s comprehensive financing cost decreased 94.9% to Mex$374 million.

The Zacks Consensus Estimate for 2023 and 2024 revenues has increased 2.9% and 3.2%, respectively, in the past 60 days, reflecting analysts’ optimism regarding the company’s prospects.

Other Stocks to Consider

Some other top-ranked stocks in the broader technology space are Dropbox (DBX - Free Report) , Badger Meter (BMI - Free Report) and Blackbaud (BLKB - Free Report) . Dropbox sports a Zacks Rank #1 (Strong Buy), whereas Blackbaud and Badger Meter hold a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Dropbox’s 2023 earnings has increased 10.1% in the past 60 days to $1.85 per share. The long-term earnings growth rate is anticipated to be 12.3%.

Dropbox’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of DBX have gained 7.5% in the past year.

The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share.

Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 5.3%. Shares of BMI have surged 75% in the past year.

The Zacks Consensus Estimate for Blackbaud’s 2023 earnings has increased 9.3% in the past 60 days to $3.75 per share.

Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 10.4%. Shares of the company have jumped 13.4% in the past year.

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