Why Ambev (ABEV) Stock Is Rising Following Q2 Earnings

Ambev SA ABEV shares are trading higher by 0.97% to $2.08 Thursday morning after the company reported better-than-expected second-quarter sales results.

What Happened?

Ambev reported quarterly earnings of 3 cents per share which met the analyst consensus estimate. The company reported quarterly sales of $3.847 billion which beat the analyst consensus estimate of $3.609 billion by 6.6%. This figure represents a 0.76% increase over sales of $3.818 billion in the same period last year.

Ambev’s CEO, Jean Jereissati, highlighted double-digit growth in Normalized EBITDA and margin expansion driven by commercial momentum and operational leverage. Total volumes showed a slight increase of 0.4% year-over-year (YoY), with net revenue rising by 4.8% YoY.

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The growth was primarily led by Brazil, which saw a 4.1% increase in volumes, including a 7.7% rise in non-alcoholic beverages (NAB) and a 2.9% increase in beer. Central America and the Caribbean (CAC) also experienced a 3.4% volume increase. However, volumes declined in Latin America South (LAS) by 13.7% and in Canada by 6.9%.

Net revenue per hectoliter (NR/hl) grew by 4.5%, contributing to overall net revenue increases in most business units: Brazil NAB rose by 15.0%, CAC by 8.4%, Brazil Beer by 6.9% and LAS by 0.5%, while Canada saw a 5.7% decline due to volume decreases.

Normalized EBITDA meanwhile increased by 15.9% YoY, driven by strong performance in Brazil (23.5% growth), CAC (17.9%), and LAS (7.6%), despite a 2.2% decline in Canada. Gross margin expanded by 200 basis points (bps), and Normalized EBITDA margin grew by 300 bps.

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How To Buy ABEV Stock

By now you're likely curious about how to participate in the market for Ambev – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stocks, like Berkshire Hathaway can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

In the the case of Ambev, which is trading at $2.06 as of publishing time, $100 would buy you 48.54 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, ABEV has a 52-week high of $3.13 and a 52-week low of $2.01.