Vamos Reports Strong Earnings Amid Stock Decline

Brazil’s Vamos’s stock plummeted 9.03% in early trading at the B3 exchange, reaching R$ 8.16 per share. However, three analysts maintain a “buy” recommendation despite the drop.

The company’s 2Q24 net profit nearly doubled to R$ 205.5 million ($36 million) year-over-year.

Meanwhile, adjusted EBITDA rose 31.6% to R$ 875.7 million ($153.6 million), slightly below expectations.

Vamos is a company that specializes in the rental and management of heavy vehicle fleets.

Bradesco BBI reaffirmed its buy recommendation with a R$ 12 target price. They cited strong truck rental performance and projected growth as key factors.

VAMO3 currently trades at a 12.6x forward P/E ratio for 2024, representing a 31% discount. This valuation appears attractive to some analysts.

XP Investments noted strong rental results but highlighted weaker dealership performance and higher asset repossession rates. They adjusted their 2024E net profit forecast upward by 13%.

Genial Investimentos viewed the results positively overall, despite some negative surprises in provisions. They maintain a buy recommendation with a R$ 12.40 target price.

Adverse weather and client delinquency, particularly in the grain transportation sector, significantly impacted Vamos’s results.

Many clients entered judicial recovery, leading to increased provisions.

The company’s leverage ratio improved to 3.39 times, down from 3.52 times a year earlier. Yet, net debt increased by 19% to R$ 10.7 billion ($1.88 billion).

Vamos’s leasing segment grew by 11.3%, reaching 50,384 assets across trucks, implements, machinery, and equipment. This growth demonstrates the company’s expanding operations.

The backlog of contracted rental revenue remained stable at R$ 14.1 billion ($2.47 billion). This stability, combined with projected growth, suggests potential for long-term investors.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.