Sk Telecom (SKM) AI Stock Analysis

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Sk Telecom

(NYSE:SKM)

69Neutral

SK Telecom scores a 69, driven by strong financial stability and positive earnings call highlights, particularly in AI growth and operational efficiency. While valuation is attractive, technical analysis suggests potential short-term challenges with bearish indicators. The stock remains appealing for long-term growth due to its strategic focus on AI and solid dividend yield.

Positive Factors

AI Business Growth

The AI business is seen as a long-term growth catalyst, with potential earnings upsides from AI data center services and AI B2B developments.

Shareholder Returns

The company is expected to provide attractive shareholder returns with an estimated 6.2% dividend yield.

Negative Factors

Net Profit Decline

Net profit was down 9% year-over-year due to valuation losses in equity investments, impacting the dividend payout calculations.

Sk Telecom (SKM) vs. S&P 500 (SPY)

Market Cap

$8.00B

Dividend Yield5.41%

Average Volume (3M)394.60K

Price to Earnings (P/E)9.0

Beta (1Y)0.25

Revenue Growth-2.34%

EPS Growth12.31%

CountryUS

Employees5,054

SectorCommunication Services

Sector Strength73

IndustryTelecommunications Services

Share Statistics

EPS (TTM)2.37

Shares Outstanding386,619,020

10 Day Avg. Volume421,868

30 Day Avg. Volume394,597

Financial Highlights & Ratios

PEG Ratio0.73

Price to Book (P/B)N/A

Price to Sales (P/S)0.67

Price to Cash Flow (P/CF)2.50

P/FCF Ratio4.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$48.94

Price Target Upside139.20% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Sk Telecom Business Overview & Revenue Model

Company DescriptionSK Telecom Co., Ltd. (SKM) is a South Korean telecommunications company and a leading player in the global telecommunications industry. It operates in several sectors including mobile telecommunications, media, security, and commerce. The company offers a wide range of services such as wireless voice and data transmission, fixed-line telephony, broadband internet, and IPTV services. SK Telecom is known for its innovative solutions and is a pioneer in 5G technology, striving to enhance connectivity and digital experiences for its customers.

How the Company Makes MoneySK Telecom generates revenue through multiple streams, primarily from its mobile telecommunications services, which include voice, data, and value-added services such as messaging and content delivery. The company also earns from its fixed-line services, providing broadband internet and IPTV services to residential and business customers. Additionally, SK Telecom has diversified its revenue by investing in media, security, and commerce sectors through subsidiaries and partnerships. Its media division generates income from content distribution and advertising, while its security services offer surveillance and cyber security solutions. SK Telecom's strategic partnerships with global tech firms and its leadership in 5G technology contribute significantly to its revenue growth, as it continues to expand its services and customer base.

Sk Telecom Financial Statement Overview

Summary

Sk Telecom presents a solid financial position with stable revenue growth and strong operational margins. The balance sheet is robust, with a healthy equity buffer and manageable debt levels. Cash flow generation is strong, though there is room for improvement in free cash flow growth. Overall, the company demonstrates financial stability with some areas for profitability enhancement.

Income Statement

Positive

Sk Telecom has shown a stable revenue growth with a 1.89% increase year-over-year and a healthy gross profit margin of 85.01% for TTM (Trailing-Twelve-Months). However, the net profit margin is relatively low at 7.26%, indicating room for improvement in profitability. EBIT and EBITDA margins are robust at 28.13% and 30.25%, respectively, reflecting strong operational performance.

Balance Sheet

Positive

The company maintains a solid equity position with an equity ratio of 38.51% and a manageable debt-to-equity ratio of 0.57. Return on equity is moderate at 11.08%, suggesting efficient use of equity capital. Overall, the balance sheet is stable, but there is a need to monitor liabilities closely.

Cash Flow

Positive

Operating cash flow remains strong with a high operating cash flow to net income ratio of 2.93, indicating good cash generation relative to profit. However, free cash flow growth is modest at 17.92% year-over-year, and the free cash flow to net income ratio stands at 1.69, suggesting limited free cash flow growth potential.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
17.94T	17.61T	17.30T	16.75T	16.09T
	Gross Profit
12.93T	12.74T	12.44T	12.11T	11.70T
	EBIT
1.82T	1.75T	1.61T	1.39T	1.25T
	EBITDA
5.16T	5.09T	4.96T	5.06T	4.98T
	Net Income Common Stockholders
1.30T	1.09T	912.40B	2.41T	1.50T
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.35T	1.75T	2.12T	1.39T	2.95T
	Total Assets
30.52T	30.12T	31.31T	30.91T	47.91T
	Total Debt
6.67T	10.66T	11.08T	10.37T	12.16T
	Net Debt
4.32T	9.20T	9.20T	9.50T	10.79T
	Total Liabilities
18.64T	17.89T	19.15T	18.58T	23.51T
	Stockholders Equity
11.75T	10.99T	11.32T	11.58T	23.74T
Cash Flow		Free Cash Flow
0.00	1.87T	2.11T	1.72T	2.13T
	Operating Cash Flow
0.00	4.95T	5.16T	5.03T	5.82T
	Investing Cash Flow
0.00	-3.35T	-2.81T	-3.49T	-4.25T
	Financing Cash Flow
0.00	-2.02T	-1.35T	-2.05T	-1.46T

Sk Telecom Technical Analysis

Technical Analysis Sentiment

Negative

Last Price20.46

Price Trends

50DMA

21.64

Negative

100DMA

21.83

Negative

200DMA

22.21

Negative

Market Momentum

MACD

-0.15

Positive

RSI

43.54

Neutral

STOCH

26.59

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKM, the sentiment is Negative. The current price of 20.46 is below the 20-day moving average (MA) of 21.36, below the 50-day MA of 21.64, and below the 200-day MA of 22.21, indicating a bearish trend. The MACD of -0.15 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 26.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SKM.

Sk Telecom Risk Analysis

Sk Telecom disclosed 32 risk factors in its most recent earnings report. Sk Telecom reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Sk Telecom Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIV	77 Outperform	$13.33B	13.33	7.95%	2.92%	-0.47%	1.69%
TLK	73 Outperform	$14.17B	9.52	16.61%	6.10%	-2.99%	-7.36%
VOD	71 Outperform	$20.89B	8.14	4.31%	8.33%	-24.84%	-74.77%
KT	70 Outperform	$8.02B	24.41	3.02%	6.11%	-3.60%	-51.54%
SKM	69 Neutral	$8.00B	8.95	11.19%	5.41%	-2.34%	12.31%
TEF	64 Neutral	$26.62B	―	<0.01%	5.13%	1.18%	―
Sector *	58 Neutral	$25.04B	3.23	-10.53%	4.39%	2.30%	-43.13%

* Communication Services Sector Average

Performance Comparison

SKM

Sk Telecom

20.46

-0.71

-3.35%

16.71

3.15

23.23%

TLK

PT Telekomunikasi Indonesia Tbk

13.24

-7.31

-35.57%

VIV

Telefonica Brasil

8.28

-1.31

-13.66%

TEF

Telefonica

4.37

0.29

7.11%

VOD

Vodafone

8.19

0.19

2.37%

Sk Telecom Earnings Call Summary

Earnings Call Date: Feb 12, 2025 | % Change Since: -5.23% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Positive

The earnings call reflects a generally positive outlook for SK Telecom, with growth in AI-related revenues and operational improvements offsetting concerns about MNO business slowdown and cautious dividend strategies.

Highlights

Consolidated Revenue Growth

Consolidated revenue reported KRW 17,940.6 billion, up 1.9% year-over-year, with sustained growth in fixed and mobile, enterprise, and AI business areas.

AI-Related Revenue Increase

AI-related revenue grew 19% year-over-year in 2024, with significant investments in AI partnerships and new service launches like SKT GPU-as-a-Service.

Net Income Increase

Net income posted KRW 1,438.8 billion, up 25.6% year-over-year, aided by business portfolio restructuring and asset efficiency enhancement.

Operational Improvements

Operational improvements led to a 4% year-over-year increase in operating profit, with major expense reductions and AI-driven cost efficiency measures.

AI Infrastructure Development

Plans to build a hyperscale AI data center leveraging SK Group's capabilities, with a long-term goal to become an AI data center hub in the Asia Pacific region.

Lowlights

MNO Business Slowdown

The MNO business experienced a slight slowdown in top-line growth, although customer-friendly roaming services contributed to some revenue growth.

Marketing Cost Reduction

Marketing costs were reduced in Q4, reflecting a stable but competitive market environment after the handset subsidy ban was lifted.

Dividend Concerns

Despite improved earnings, the dividend per share was maintained at the same level as the previous year, reflecting a cautious approach due to uncertain business environments.

Company Guidance

In the earnings conference call for the fourth quarter and fiscal year 2024, SK Telecom provided substantial guidance on their financial performance and future outlook. Consolidated revenue for 2024 reached KRW 17,940.6 billion, marking a 1.9% increase year-over-year, with a consolidated operating profit growth of 4% and an operating profit margin exceeding 10%. The net income rose significantly by 25.6% year-over-year to KRW 1,438.8 billion, driven by business portfolio restructuring and asset efficiency enhancements. AI-related revenue saw substantial growth, increasing by 19% year-over-year, with significant contributions from AI B2B segments like AIX and AIDC. For 2025, SK Telecom has set an annual consolidated revenue target of KRW 17.8 trillion, representing approximately 1% growth year-over-year. The company remains focused on continuous operational improvements and strategic investments in AI, aiming for further growth in both AI-related revenue and operating income. Additionally, the company declared a dividend per share (DPS) of KRW 3,540 for 2024, maintaining stability in shareholder returns amidst economic uncertainties.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.