Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 0.1%. Since the same quarter one year prior, revenues rose by 18.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, AMERICA MOVIL SA DE CV's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for AMERICA MOVIL SA DE CV is rather high; currently it is at 54.30%. Regardless of AMOV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.42% trails the industry average.
- AMOV has underperformed the S&P 500 Index, declining 11.28% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The debt-to-equity ratio of 1.34 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, AMOV has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
America Movil, S.A.B. de C.V. provides telecommunications services primarily in the United States, Latin America, and the Caribbean. The company offers mobile and fixed voice services, including airtime, local, long-distance, public telephony, and network interconnection services. The company has a P/E ratio of 17.9, above the S&P 500 P/E ratio of 17.7. America Movil S.A.B. de C.V has a market cap of $81.46 billion and is part of the technology sector and telecommunications industry. Shares are down 7.5% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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