What a difference a day makes! After Tuesday brought nothing but bad news for wireless investors, NII Holdings (NIHD) reminded us that there can still be winners in the group.
NIHD jumped almost 8% at the open and built on the gains to close 11% higher. The company reported great 2Q08 results with pretty much ever key metric coming I ahead of analyst estimates. This marks the second consecutive quarter where the company reported upside. This time it is enough to rebuild confidence and put an end to lingering negative sentiment form the stocks crash form $90 last summer to a low $30 as worries mounted over its iDEN technology and competition in Mexico, its largest market. The whole tone of the conference call was improved. I think it marks a turning point and with a little help form the market the stock can get back to the $60s before year end.
NIHD is a dynamic growth company. ..

….In 2Q, revenues grew 40%, EBITDA grew 48%, subscribers grew 34%, and EBITDA margins expanded. Currency helped but the organic growth rates are in the 30% range. Net adds grew sequentially. Mexico enjoyed 24% revenue growth and expanding margins. Brazil, the #2 market, is blazing. Revenues up more than 70% for third straight quarter, EBITDA doubled, subs up 41%, net adds grew sequentially for the tenth straight quarter.
In the press release and on the call, management stated it is on track to meet or exceed guidance. Estimates are headed up. The stock is trading at 8.8 and 7.0 times 2008 and 2009 EBITDA. That is a premium to the group but one that NIHD has always held and had earned prior the sentiment shift when serious questions about the sustainability of growth arose about a year ago. NIHD is back and so is the premium.