Telecom Argentina SA: Leads amongst peers with strong fundamentals

Telecom Argentina SA relative valuation is UNDERVALUED and it has a fundamental analysis score of 63.

Our analysis is based on comparing Telecom Argentina SA with the following peers – TIM Participacoes S.A. Sponsored ADR, Telefonica SA Sponsored ADR, Millicom International Cellular S.A., Telefonica Brasil S.A. Sponsored ADR Pfd, Nortel Inversora SA Sponsored ADR Pfd Class B, America Movil SAB de CV Sponsored ADR Class L and Telecom Italia S.p.A. Sponsored ADR (TSU-US, TEF-US, MIICF-US, VIV-US, NTL-US, AMX-US and TI-US).

Telecom Argentina SA has shown good performance overall, both over the last one year (at 57.54%) as well as over the last month (at 14.45%). Share price performance over the last month, though has been lower than that over the last year. But Telecom Argentina SA’s stock has done better than its overall peer group whose performance was -0.38% over the last month.

Company Snapshot

  • Considering peers, relative outperformance over the last year and the last month suggest a leading position.
  • It currently trades at a Price/Book ratio of (2.01).
  • We classify TEO-US as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • TEO-US has a successful operating model with relatively high net profit margins and asset turns.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • TEO-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While TEO-US‘s revenues growth in recent years has been around the peer median, the stock’s below peer median P/E ratio suggests that the market likely sees the company’s long-term growth prospects to be fading.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • TEO-US might have enough interest coverage to take-on additional debt prudently.
  • Our analysis rates Telecom Argentina SA as UNDERVALUED relative to its peers.

Share Price Performance

Considering peers, relative outperformance over the last year and the last month suggest a leading position.

TEO-US‘s share price performance of 57.54% over the last 12 months is above peer median of 16.89%. The 30-day trend in its share price performance of 14.45% is also above the peer median of -0.38% suggesting that this company is a leading performer relative to its peers.

Share Price Performance

Quadrant label definitions. Hover to know more

Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

Telecom Argentina SA’s price of USD 29.46 is lower than CapitalCube’s implied price of USD 32.87. CapitalCube believes that at these levels, Telecom Argentina SA is undervalued and has upside potential. Over the last 52 week period, the stock has fluctuated between USD 17.04 and USD 29.89.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

Telecom Argentina SA engages in the provision of telecommunications services. It operates through the following segments: Fixed Services, Personal Mobile Services and Nucleo Mobile Services. The Fixed Services segment offers basic telephone services; interconnection services; data transmission and internet services; information and communication technology services; other telephone services; and sale of equipment. The Personal Mobile Services provides voice, data, internet services, and sells mobile communication devices. The Nucleo Mobile Services offers telecommunication services in Paraguay. The company was founded on January 5, 1990 is headquartered in Buenos Aires, Argentina.

Disclaimer

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