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America Movil (AMX) Gains 19.7% YTD: Will the Trend Continue?

Zacks Equity Research
·3-min read

America Movil AMX witnessed strong momentum this year, with its shares gaining 19.7% year to date compared with the sub-industry’s rise of 9.8%.

The company 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.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Catalysts Behind the Price Surge

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

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 prepaid subscribers.

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

The company’s efforts to increase shareholder value, lower debt and comprehensive financing costs by selling off cellular towers to Sitios Latinoamerica will bode well in the long term. In the last reported quarter, the company’s comprehensive financing cost decreased 94.9% to Mex$374 million.

The company came up with an impressive performance in the first quarter of 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 Zacks Consensus Estimate for 2023 and 2024 revenues has increased 11.4% and 5.1%, respectively, in the past 60 days, reflecting analysts’ optimism regarding the company’s prospects.

Also, the company has an impressive VGM Score of A. 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.

Despite strong demand, the company's near-term prospects might be affected by global macroeconomic weakness and inflation. Also, AT&T’s entry into the Mexican telecom industry and leveraged balance sheets are concerns.

Other Stocks to Consider

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

The Zacks Consensus Estimate for Badger Meter’s 2023 earnings per share (EPS) has increased 1.1% in the past 60 days to $2.72.

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 81.5% in the past year.

The Zacks Consensus Estimate for InterDigital’s 2023 EPS has increased 249% in the past 60 days to $8.08. The company’s long-term earnings growth rate is 13.9%.

InterDigital’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 170.9%. Shares of IDCC have rallied 49.3% in the past year.

The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has improved 9.3% in the past 60 days to $3.75.

Blackbaud’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 10.4%. Shares of the company have risen 17.8% in the past year.

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America Movil, S.A.B. de C.V. Unsponsored ADR (AMX) : Free Stock Analysis Report

Badger Meter, Inc. (BMI) : Free Stock Analysis Report

InterDigital, Inc. (IDCC) : Free Stock Analysis Report

Blackbaud, Inc. (BLKB) : Free Stock Analysis Report

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Zacks Investment Research