America Movil grows service revenue about 5 percent with low leverage. At 4.3 times cash profit, the price implies flat growth. I see 18.9 percent upside to $27.35.
Key points
- MXN250.6 billion of revenue in Q3 FY26 grew 7.6 percent from last year on mobile strength.
- MXN91.1 billion of profit for 12 months to Sep 2026 leaves shares at 14.0 times earnings.
- 1.31 times net debt to cash profit in Jun 2026 funds fiber deals plus payouts.
The call
Growth is priced as flat. At 23 dollars per ADS today, firm value is 4.3 times cash profit. That implies only slow growth with flat margins.
Quarterly revenue keeps climbing (MXN billions)Sources: AMX 6-K releases Feb 2025 to Jul 2026; Q3 FY26 Oct 20 2026 report.
Growth looks faster in reality. Service revenue rose about 5 percent in Q2 on a constant currency basis, where that phrase means without exchange moves. Mexico prepaid is recovering and broadband adds remain strong.
Target rises with the EBITDA multiple (USD per ADS)My arithmetic; 2027 EBITDA MXN 402.4B, net debt MXN 400B, 60B shares, 18.42 pesos per dollar.
Valuation
| Driver | Value |
|---|
| Cash profit in 2027 | MXN402.4 billion |
| Firm value multiple in 2027 | 4.75 times |
| Firm value in 2027 | MXN1,911.5 billion |
| Less net debt in 2027 | MXN400.0 billion |
| Target per ADS in 12 months | $27.35 |
Each ADS equals 20 Mexican shares, and cash profit means EBITDA or profit before interest, tax and depreciation. A 4.75 times firm value multiple fits steady regional telecom businesses. With 18.9 percent upside to 27.35 dollars, the asymmetry favors a buy.
Risks
- Brazil price wars in 2027 could cut mobile growth, seen in monthly postpaid net additions and service revenue.
- Peso weakness in 2027 could shrink dollar earnings, seen in quarterly currency translation losses.
- Mexico line suspensions in late 2026 could raise churn, seen in monthly wireless disconnections.
What would change my mind
Constant currency service growth below 3 percent for two straight quarters through mid 2027 would break the growth case.