We upgrade our recommendation for NET Servicos (NETC) to Outperform. Since 2005, the company has been posting impressive operating results, including continued growth in its subscriber base, increasing average revenue per user, strong growth in its broadband and voice service divisions, better cash flow generation and continued growth in revenues.
NET Servicos is pursuing a conservative cash management policy to ensure implementation of its strategy of sustained growth. Management’s view is to sustain the organic growth of the company irrespective of the capital market condition.
We also remain optimistic about the acquisition of ESC 90 Telecomunicacoes by the company. Our target of $13.50 reflects an expected 6% gain in share price.Zacks Investment Research
