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April 06, 2009

NII Holdings Guides Subscribers Lower

NIHD is down 19% after announcing its 1Q subscriber figures. The numbers were below expectations and the company lowered its full year subscriber forecasts. Especially troubling was weakness in Mexico, the company's largest and most challenging market. No change was made to full year financial guidance but an update was promised on the 4/23 1Q earnings call. The news on financial figures amy not be so bad as subscriber growth brings acquisition expenses and handset subsidies. Also, Peso and Brazilian Real have strengthened since 2009 guidance was given.

This is a tough blow in the near-term for NIHD bulls, including myself. I am inclined to sell if the stock lifts as analysts defend it. Waiting to hear from Goldman which recently upgraded when the stock was near $11. I am torn because even if growth slows, NIHD remains a double digit growth stock at the operating and subscriber level. Not many of those in the world. Management is top notch and EBITDA multiple is really low.

Posted by Steve Birenberg at April 6, 2009 12:03 PM in NIHD