America Movil S.A.B. De C.V. Stock Downgraded (AMX)

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NEW YORK ( TheStreet) -- America Movil S.A.B. de C.V (NYSE: AMX) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, 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 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 54.98%. Regardless of AMX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMX's net profit margin of 8.38% is significantly lower than the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Wireless Telecommunication Services industry. The net income has significantly decreased by 52.2% when compared to the same quarter one year ago, falling from $2,523.67 million to $1,206.43 million.
  • The debt-to-equity ratio is very high at 2.35 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, AMX maintains a poor quick ratio of 0.71, which illustrates the inability to avoid short-term cash problems.

America Movil, S.A.B. de C.V. provides telecommunications services in the United States, Latin America, and the Caribbean. It offers mobile and fixed voice services, including airtime, local, long-distance services, public telephony services, and network interconnection services. The company has a P/E ratio of 12, below the S&P 500 P/E ratio of 17.7. America Movil S.A.B. de C.V has a market cap of $78.13 billion and is part of the technology sector and telecommunications industry. Shares are down 6.2% year to date as of the close of trading on Thursday.

You can view the full America Movil S.A.B. de C.V Ratings Report or get investment ideas from our investment research center.

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