IHS Stock Surges 37.9% in the Past Year: Is It Still Worth Buying?

IHS Holding Limited’s IHS shares have surged 37.9% in the past year, outpacing the industry and the S&P 500, which have returned 35.3% and 10%, respectively. Shares of this shared communications infrastructure owner and operator have also outshone the Computer and Technology sector, which increased 8.3%, and its peers like Anterix Inc. ATEX and Bandwidth Inc. BAND, which have declined 7.4% and 29.2%, respectively.

IHS Outperforms the Industry, S&P 500 & Peers

Closing at $4.95 on Tuesday, the stock is trading below its 52-week high of $5.75 but higher than its 52-week low of $2.44. The stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.

IHS Shares’ 50-Day and 200-Day SMA

What’s Driving the Stock?

IHS is benefiting from its growing presence across emerging markets in Africa. Strong demand for its critical infrastructure that facilitates mobile communication coverage and connectivity in the backdrop of increasing 5G deployment has been driving its performance. In the fourth quarter of 2024, the company generated revenues of $437.8 million, reflecting an increase of 39.3% year over year on an organic basis. The results were driven by growth in revenues from colocation (average number of tenants per tower), lease amendments and new sites.

IHS remains well-placed to leverage its market-leading position and capitalize on the growing demand for communications infrastructure solutions, particularly in Nigeria. Exiting 2024, the company’s total number of towers in its largest market, Nigeria, was 16,495, reflecting an increase of 0.6% year over year.

The company is also witnessing strength in the SSA market (comprising South Africa, Cameroon and other countries), supported by the addition of new tenants and higher revenues from colocations and lease amendments. For instance, IHS added approximately 100 towers and more than 800 tenants across the SSA market in 2024. In addition, the deployment of 5G across sub-Saharan Africa and Latin America is expected to drive demand for IHS' towers.

IHS is steadily progressing on its strategic priorities to expand its presence across markets. In 2024, it successfully renewed and extended all MTN MLAs, which include MTN Nigeria. The company also entered into an extended deal with Airtel Nigeria to add 3,950 new tenancies.

However, the company operates in the highly competitive wireless communications market, comprising well-recognised providers of critical infrastructure and broadband solutions. As one of its peers, Anterix is well-known for providing transformative broadband solutions to utility and critical infrastructure customers. Another peer, Bandwidth, operates as a Communications Platform-as-a-Service (CPaaS) provider.

IHS’ Earnings Estimate Revision

The Zacks Consensus Estimate for IHS’ 2025 earnings has increased 30.9% to 72 cents per share over the past 60 days, indicating year-over-year growth of 114.7%. The consensus mark for first-quarter 2025 earnings increased 21.4% to 17 cents per share, indicating a year-over-year increase of 342.9%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Stock Valuation

With a forward 12-month price-to-earnings ratio of 6.52X, which is below the industry average of 7.95X, IHS stock presents an attractive valuation for investors. In comparison with IHS’ valuation, Bandwidth is trading at 7.96X.

Final Take on IHS

Solid momentum in the communication infrastructure market, supported by growing demand for scalable infrastructure for seamless connectivity with the wide proliferation of IoT, transition to cloud and accelerated 5G rollout, positions IHS favorably for strong growth. Its strategic priorities and growth investments also bode well for the company.

The stock’s attractive valuation, positive analyst sentiment and robust growth prospects indicate it is the right time for potential investors to bet on this Zacks Rank #1 (Strong Buy) company. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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