Telecom Argentina (TEO) AI Stock Analysis

• Market Cap: $6.01B
• Dividend Yield: N/A
• Average Volume (3M): 152.39K
• Price to Earnings (P/E): 5.2
• Beta (1Y): 0.69
• Revenue Growth: -26.74%
• EPS Growth: N/A
• Country: US
• Employees: 19,987
• Sector: Communication Services
• Sector Strength: 79
• Industry: Telecommunications Services
• EPS (TTM): 2.15
• Shares Outstanding: 125,611,600
• 10 Day Avg. Volume: 180,443
• 30 Day Avg. Volume: 152,387
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.25
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $8.75
• Price Target Upside: -20.96% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

Telecom Argentina shows strong revenue growth and a solid balance sheet, but its profitability is hampered by negative EBIT. The stock appears undervalued based on its low P/E ratio, though technical indicators suggest weak momentum. Improving profitability and cash conversion efficiency are critical for enhancing the stock's performance.

Positive Factors

Acquisition Synergies

The acquisition of Telefonica’s assets in Argentina could result in sizeable synergies and relevant market repair, as the country would move to a two-player structure.

Growth Opportunities

TEO has solid growth optionalities in B2B, financial services, and international markets.

Market Position

TEO is an integrated telecom operator with premium positioning in Argentina's relatively consolidated mobile market and a leading position in fixed broadband.

Negative Factors

Competitive and Financial Risks

There are lingering risks in fixed-broadband competition and the company's debt position.

Government Resistance

The office of the Presidency of Argentina issued a note indicating resistance to this deal, suggesting that the government would take all relevant measures to prevent it.

Valuation Concerns

TEO’s stand-alone valuation is very demanding versus other LatAm telco peers.

Telecom Argentina Business Overview & Revenue Model

Company Description

Telecom Argentina S.A., together with its subsidiaries, provides telecommunications services in Argentina and internationally. The company offers telephone services, including local, domestic, and international long-distance telephone services, as well as public telephone services; and other related supplementary services, such as call waiting, call forwarding, conference calls, caller ID, voice mail, itemized billing, and maintenance services. It also provides interconnection services, such as traffic and interconnection resource, dedicated Internet access, video signals transportation in standard and high definitions, audio and video streaming, dedicated links, backhaul links for mobile operators, data center hosting/housing services, dedicated links, layer 2 and layer 3 transport networks, video links, value-added services, and other services. In addition, the company offers mobile telecommunications services, including voice communications, high-speed mobile Internet content and applications download, online streaming, and other services; and sells mobile communication devices, such as handsets, Modems MiFi and wingles, and smart watches under the Personal brand. Further, it provides internet connectivity products, including virtual private network services, traditional Internet protocol links, and other products; data services; and programming and other cable television services. The company was formerly known as Cablevisión S.A. and changed its name to Telecom Argentina S.A. in January 2018. Telecom Argentina S.A. was founded in 1979 and is based in Buenos Aires, Argentina.

How the Company Makes Money

Telecom Argentina makes money primarily through subscription-based services offered to consumers and businesses. The company generates revenue from its mobile telephony services, which include voice, data, and value-added services. Fixed-line telephony also contributes to its income, offering traditional voice services and advanced features. Broadband internet services are another significant revenue stream, with Telecom Argentina providing high-speed internet access to residential and commercial customers. The company also earns from its subscription television services, offering various content packages to subscribers. Additionally, Telecom Argentina may have partnerships with content providers and other technology firms to enhance its offerings and expand its market reach. Factors such as market demand, regulatory environment, and technological advancements significantly influence the company's earnings.

Telecom Argentina Financial Statement Overview

Summary

Telecom Argentina demonstrates resilience in revenue growth and a strong asset base, though profitability is challenged by negative EBIT. Cash flows are positive, signaling operational stability. The company should focus on improving profitability and optimizing cash conversion to further strengthen its financial position.

Income Statement

Telecom Argentina shows a mixed income statement performance. The gross profit margin is solid due to a high gross profit relative to revenue. However, the company struggles with negative EBIT and fluctuating net income, impacting net profit margins negatively. Despite these challenges, the company has shown significant revenue growth, indicating potential for recovery and expansion.

Balance Sheet

The balance sheet is relatively strong with a healthy equity ratio, indicating a solid asset base supported by equity. The debt-to-equity ratio is moderate, suggesting manageable leverage. However, there is room for improvement in enhancing overall asset utilization and reducing debt levels.

Cash Flow

Cash flow performance is steady with positive operating and free cash flows. The company has managed to improve free cash flow over time. However, the operating cash flow to net income ratio suggests room for greater efficiency in converting profits into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.14T	2.06T	2.27T	2.58T	886.76B
	Gross Profit
3.03T	1.51T	1.68T	1.89T	664.58B
	EBIT
-146.47B	-125.06B	-918.47B	-16.91B	59.67B
	EBITDA
2.89T	175.33B	31.53B	1.18T	297.50B
	Net Income Common Stockholders
1.01T	-257.73B	-647.21B	52.56B	-16.80B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
351.90B	283.74B	150.80B	59.67B	35.77B
	Total Assets
10.94T	5.48T	5.38T	2.10T	1.14T
	Total Debt
3.09T	2.22T	1.55T	556.43B	316.94B
	Net Debt
2.77T	2.06T	1.43T	517.76B	288.97B
	Total Liabilities
5.41T	3.23T	2.85T	1.03T	548.22B
	Stockholders Equity
5.43T	2.17T	2.48T	1.05T	577.28B
Cash Flow		Free Cash Flow
417.29B	335.77B	285.09B	327.01B	134.05B
	Operating Cash Flow
811.50B	617.70B	666.49B	788.80B	293.88B
	Investing Cash Flow
-383.42B	-593.71B	-516.52B	-698.31B	-240.42B
	Financing Cash Flow
-405.62B	-72.04B	-142.62B	-123.12B	-105.30B

Telecom Argentina Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.07
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEO, the sentiment is Positive. The current price of 11.07 is above the 20-day moving average (MA) of 10.48, above the 50-day MA of 11.06, and above the 200-day MA of 9.83, indicating a bullish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 46.04 is Neutral, neither overbought nor oversold. The STOCH value of 30.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TEO.

Telecom Argentina Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIMB	82 Outperform	$7.04B	11.95	12.04%	3.13%	-0.91%	1.51%
VIV	77 Outperform	$13.93B	13.70	7.95%	2.82%	-0.47%	1.69%
TIGO	77 Outperform	$4.73B	18.61	7.13%	3.64%	2.53%	―
TKC	75 Outperform	$5.20B	11.86	6.76%	2.53%	8.78%	-21.85%
SKM	69 Neutral	$8.35B	8.99	11.19%	5.13%	-2.34%	12.31%
TEO	63 Neutral	$6.01B	5.16	23.27%	―	-26.74%	―
Sector *	58 Neutral	$26.33B	3.17	-10.68%	4.33%	2.16%	-43.07%