Millicom International Cellular SA (TIGO) AI Stock Analysis

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Millicom International Cellular SA

(NASDAQ:TIGO)

77Outperform

Millicom International Cellular SA demonstrates strong financial performance with robust revenue growth and operational efficiencies. The earnings call provided positive future guidance, and technical indicators suggest a positive trend. While leverage remains a concern, the company's strategic initiatives and fair valuation further bolster its attractiveness to investors.

Millicom International Cellular SA (TIGO) vs. S&P 500 (SPY)

Market Cap

$4.75B

Dividend Yield3.64%

Average Volume (3M)1.27M

Price to Earnings (P/E)18.7

Beta (1Y)0.32

Revenue Growth2.53%

EPS GrowthN/A

CountryUS

Employees14,000

SectorCommunication Services

Sector Strength77

IndustryTelecommunications Services

Share Statistics

EPS (TTM)1.47

Shares Outstanding172,096,300

10 Day Avg. Volume1,449,518

30 Day Avg. Volume1,265,112

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)N/A

Price to Sales (P/S)0.91

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$35.88

Price Target Upside26.07% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Millicom International Cellular SA Business Overview & Revenue Model

Company DescriptionMillicom International Cellular SA, operating under the TIGO brand, is a telecommunications and media company that provides a range of digital services in Latin America and Africa. Its core offerings include mobile and fixed-line voice services, broadband internet, and digital television. Millicom focuses on delivering connectivity and digital services to emerging markets, enhancing access to communication and information for individuals and businesses.

How the Company Makes MoneyMillicom International Cellular SA generates revenue through a diversified business model centered around its telecommunications and digital services. The company earns money primarily from mobile voice and data services, where customers pay for monthly subscriptions, prepaid plans, and data packages. Additionally, Millicom derives income from its fixed broadband internet services, offering high-speed internet plans to residential and business customers. The digital television segment contributes to revenue through subscription fees for cable and satellite TV packages. Millicom also engages in business-to-business solutions, providing cloud services, managed services, and other enterprise solutions to corporate clients. Strategic partnerships, particularly in network infrastructure and digital content, enhance its service offerings and market reach, further bolstering revenue streams.

Millicom International Cellular SA Financial Statement Overview

Summary

Millicom International Cellular SA exhibits strong financial performance, with notable improvements in revenue growth, profitability, and cash flow generation. The company's gross profit and EBIT margins are strong, and there is a significant rebound in net profit margin. However, a high debt-to-equity ratio presents a risk, although improvements in return on equity indicate better equity utilization.

Income Statement

Very Positive

Millicom International Cellular SA has shown a strong performance in its income statement. The company achieved a noticeable revenue growth rate of 2.53% from 2023 to 2024, and its gross profit margin improved significantly to 75.54%. The net profit margin saw a substantial recovery from -1.45% in 2023 to 4.36% in 2024, demonstrating a significant rebound in profitability. Moreover, EBIT margin increased to 23.12%, and EBITDA margin stood at 39.92%, indicating robust operational performance.

Balance Sheet

Positive

The balance sheet of Millicom International Cellular SA shows a mixed picture. The debt-to-equity ratio is high at 1.89, reflecting significant leverage, which could pose a risk. However, the return on equity improved to 6.97% in 2024, indicating better utilization of equity. The equity ratio is relatively stable at 26.42%, suggesting a balanced approach towards financing.

Cash Flow

Positive

The cash flow statement presents a positive outlook with a remarkable free cash flow growth rate of 2557.5% from 2023 to 2024, driven by improved operating cash flow. The operating cash flow to net income ratio is strong, demonstrating efficient cash generation relative to reported earnings. However, the free cash flow to net income ratio is lower at 4.20, indicating some discrepancy between cash flows and accounting profits.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.80B	5.66B	5.62B	4.62B	4.17B
	Gross Profit
4.38B	2.20B	4.12B	3.31B	3.00B
	EBIT
1.34B	826.00M	915.00M	659.00M	446.00M
	EBITDA
2.32B	2.11B	2.17B	2.16B	1.38B
	Net Income Common Stockholders
253.00M	-82.00M	16.00M	590.00M	-373.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
699.00M	775.00M	1.04B	895.00M	1.03B
	Total Assets
13.74B	14.52B	14.20B	15.14B	12.42B
	Total Debt
6.86B	7.74B	7.82B	8.91B	6.71B
	Net Debt
6.16B	6.96B	6.78B	8.02B	5.84B
	Total Liabilities
10.16B	11.07B	10.56B	12.40B	10.15B
	Stockholders Equity
3.63B	3.53B	3.60B	2.58B	2.06B
Cash Flow		Free Cash Flow
1.06B	40.00M	212.00M	48.00M	-3.00M
	Operating Cash Flow
1.60B	1.22B	1.28B	956.00M	821.00M
	Investing Cash Flow
-604.00M	-1.10B	-1.10B	-2.70B	-495.00M
	Financing Cash Flow
-1.07B	-377.00M	-1.00M	1.78B	-598.00M

Millicom International Cellular SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price28.46

Price Trends

50DMA

28.24

Positive

100DMA

26.62

Positive

200DMA

25.88

Positive

Market Momentum

MACD

0.71

Positive

RSI

58.15

Neutral

STOCH

42.35

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TIGO, the sentiment is Positive. The current price of 28.46 is below the 20-day moving average (MA) of 29.52, above the 50-day MA of 28.24, and above the 200-day MA of 25.88, indicating a neutral trend. The MACD of 0.71 indicates Positive momentum. The RSI at 58.15 is Neutral, neither overbought nor oversold. The STOCH value of 42.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TIGO.

Millicom International Cellular SA Risk Analysis

Millicom International Cellular SA disclosed 35 risk factors in its most recent earnings report. Millicom International Cellular SA 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

Millicom International Cellular SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIMB	82 Outperform	$7.01B	12.64	12.04%	3.21%	-0.91%	1.51%
TIGO	77 Outperform	$4.75B	18.68	7.13%	3.64%	2.53%	―
PHI	76 Outperform	$4.83B	8.54	29.05%	5.64%	-0.15%	17.96%
TKC	75 Outperform	$5.15B	11.72	6.76%	2.56%	8.78%	-21.85%
USM	65 Neutral	$5.60B	―	-0.85%	―	-3.48%	-169.60%
TEO	63 Neutral	$5.48B	5.16	23.27%	―	-26.74%	―
Sector *	58 Neutral	$25.97B	3.12	-10.67%	4.37%	2.16%	-43.01%

* Communication Services Sector Average

Performance Comparison

TIGO

Millicom International Cellular SA

28.46

9.52

50.26%

PHI

PLDT

22.49

-0.36

-1.58%

TEO

Telecom Argentina

11.07

4.20

61.14%

TIMB

TIM

14.82

-0.52

-3.39%

TKC

Turkcell Iletisim

6.08

0.74

13.86%

USM

United States Cellular

65.88

30.67

87.11%

Millicom International Cellular SA Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: 2.15% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong overall performance for Millicom with record cash flow and significant margin improvements. However, challenges such as service revenue decline, competitive pressures, and currency impacts in certain markets were noted.

Highlights

Record Equity-Free Cash Flow

Millicom achieved a record equity-free cash flow of $728 million for 2024, excluding tower sales, marking a significant financial turnaround.

OCF Margin Improvement

Operational Cash Flow (OCF) margin increased by 8 percentage points to almost 31%, setting a new record.

Leverage Reduction

The company's leverage was reduced to 2.42 times, achieving the target of being below 2.5 times.

Strong Performance in Guatemala

Guatemala reported a 10% increase in OCF to $692 million with an EBITDA margin of 54%.

Panama's Exceptional Year

Panama achieved close to 5% service revenue growth and an EBITDA margin reaching a record 50%.

Dividend and Share Buyback Program

The company resumed shareholder remuneration with a dividend of $1 per share paid in January and a $150 million share buyback program.

Lowlights

Service Revenue Decline

Service revenue decreased by 2.9% to $1.34 billion, impacted by a $30 million FX effect in Colombia and a $25 million impact from Panama B2B projects.

Bolivia Currency Impact

Expected negative impacts on service revenue and EBITDA due to Bolivia's currency devaluation and the new IAS 21 accounting standards.

Competitive Pressure in Costa Rica and Bolivia

Intense competition in Costa Rica affecting ARPU and customer base, and Bolivia facing challenges from currency devaluation.

Company Guidance

During the call, Millicom provided detailed financial guidance for 2025, emphasizing its strategic priorities and financial targets following a transformational 2024. Key metrics included a record equity-free cash flow of $728 million for 2024, excluding $49 million from tower monetizations, with a target of approximately $750 million for 2025. The company's leverage was successfully reduced to 2.4x by the end of 2024, with a commitment to maintain it below 2.5x throughout 2025. Revenue growth remained a focal point, with 2024 seeing a 4.6% increase in mobile service revenue and expectations for continued growth in 2025. The company also highlighted strategic initiatives, including the sale of Lati International and the acquisition of Telefonica's stake in Coltel. Additionally, Millicom reinstated shareholder remuneration, paying an interim dividend and executing a $150 million share buyback, reflecting confidence in sustaining and growing cash flow in the coming years.

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.