CONVERGE ICT Solutions, Inc.’s shares rose last week as it revised growth forecasts following the release of its second-quarter earnings data.
Converge was the 11th most actively traded stock last week, with a total of 65.21 million shares worth P854.92 million changing hands from August 12 to 16, data from the Philippine Stock Exchange showed.
Shares closed at P14.28 apiece last Friday, up by 19% from P12 apiece the previous week.
Year to date, the stock has jumped 70.4% from its P8.38 close on the last trading day of 2023.
Analysts attributed the week-on-week increase to strong earnings data released by the telecommunications company early last week.
“Solid second-quarter results reflected positively on the stock last week, driving investor sentiment upward. The earnings beat most analysts’ expectations, which likely contributed to a bullish momentum, resulting in increased trading volumes and upward price movements earlier last week,” Arielle Anne D. Santos, equity analyst at Regina Capital Development Corp., said in an e-mail.
The attributable net income of the company surged by 29.8% in the second quarter to P2.74 billion from P2.11 billion in the same period a year ago, bringing its total to P5.29 billion for the first half of the year.
Likewise, Converge’s second-quarter revenue reached P9.98 billion, climbing 14.4% from last year’s P8.72 billion.
With strong earnings for the second quarter and first half, the telecommunications company upgraded its 2024 revenue growth targets to 12-14% from 7-8%, further pushing shares upward.
“This upward revision signaled stronger-than-anticipated demand, particularly in the residential and enterprise segments. The market generally responded positively to this guidance upgrade, as it indicated management’s confidence in capturing more market share and sustaining growth. This news likely contributed to a further boost in stock price, reflecting heightened investor optimism,” Ms. Santos said.
The company’s household coverage for the second quarter reached 63.7%, higher than the 62.3% in the same period last year.
Enterprise clients likewise increased year on year to 55,906, up 30.6% from 42,797.
“The increase in enterprise clients and household coverage is a significant development for the company as it highlights the broadening market reach of Converge despite the stiff competition in the telco landscape,” Jervin De Celis, equity trader at Timson Securities, said in an e-mail.
Ms. Santos expects Converge’s full-year revenue to come at the higher end of its 12-14% forecast if recent trends continue.
Mr. De Celis sees Globe’s third-quarter revenue reaching P10.7 billion, while full-year revenue may reach P41.37 billion.
“I expect the stock to pull back early this week as investors might take this rally to take some profits. The stock may find support between P12 and P12.50, while resistance will probably range between P15 and P15.50,” he said.
Ms. Santos placed her support at P12.30 and immediate resistance at P14.70. — Karis Kasarinlan Paolo D. Mendoza
