TIM (TIMB) AI Stock Analysis

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TIM

(NYSE:TIMB)

82Outperform

TIMB's overall score reflects its strong financial performance, driven by robust revenue growth and profitability. The company's strategic focus on expanding 5G coverage and enhancing services supports a positive future outlook. While technical indicators suggest healthy market momentum, the valuation remains attractive with a reasonable P/E ratio and solid dividend yield. The positive sentiment from the earnings call further strengthens the stock's position, despite minor challenges in specific segments.

TIM (TIMB) vs. S&P 500 (SPY)

Market Cap

$7.44B

Dividend Yield3.52%

Average Volume (3M)527.98K

Price to Earnings (P/E)12.7

Beta (1Y)0.31

Revenue Growth-0.91%

EPS Growth1.51%

CountryUS

Employees8,873

SectorCommunication Services

Sector Strength73

IndustryTelecommunications Services

Share Statistics

EPS (TTM)1.20

Shares Outstanding484,160,900

10 Day Avg. Volume573,118

30 Day Avg. Volume527,975

Financial Highlights & Ratios

PEG Ratio8.43

Price to Book (P/B)N/A

Price to Sales (P/S)1.78

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

$17.68

Price Target Upside15.48% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

TIM Business Overview & Revenue Model

Company DescriptionTIM S.A., a telecommunications company, provides mobile voice and data services, broadband internet access, value-added services, and other telecommunications services and products in Brazil. The company offers services for individuals, as well as corporate solutions for small, medium, and large companies. It also offers fixed-line ultra-broadband and TIM Live services, as well as WTTx technology through Ultrafibra services and IoT solutions. In addition, the company provides digital content and services in its portfolio of packages; sells various mobile handsets and accessories through its dealer network, which includes its own stores, exclusive franchises, and authorized dealers; and offers co-billing services to other telecommunication service providers. As of December 31, 2021, it served a subscriber base of 52.6 million customers. The company is headquartered in Rio de Janeiro, Brazil. TIM S.A. is a subsidiary of TIM Brasil Serviços e Participações S.A.

How the Company Makes MoneyTIM Brasil generates revenue primarily through its mobile services, which include voice, data, and messaging services for both prepaid and postpaid customers. The company also earns income from fixed broadband services, offering high-speed internet connections to households and businesses. Additionally, TIM benefits from the sale of telecommunications equipment and devices, as well as value-added services such as digital content and cloud solutions. Significant partnerships with technology providers and infrastructure investments enhance their service offerings and contribute to revenue growth.

TIM Financial Statement Overview

Summary

TIMB demonstrates strong financial health with consistent revenue growth and solid profitability margins. The income statement shows a robust increase in revenue and profitability. The balance sheet reflects moderate leverage and good equity returns, while cash flow generation is strong despite minor volatility in free cash flow growth.

Income Statement

Very Positive

The company has demonstrated a consistent revenue growth trajectory, increasing from $17.27B in 2020 to $25.45B in 2024. The gross profit margin improved to 53.26% in 2024, and the net profit margin stood at 12.39%, indicating strong profitability. The EBIT and EBITDA margins are robust, reflecting efficient operations. The revenue growth rate from 2023 to 2024 was 6.77%, showing a positive trend. While the margins are strong, the revenue growth rate could be higher to reach a top-tier score.

Balance Sheet

Positive

The company's balance sheet shows a stable equity base, with stockholders' equity at $26.40B in 2024. The debt-to-equity ratio is 0.59, indicating moderate leverage. The return on equity (ROE) is 11.94%, reflecting good profitability relative to equity. However, the equity ratio is stable at 46.87%, which is healthy but leaves room for improvement in asset management.

Cash Flow

Positive

The cash flow statement reveals a strong operating cash flow of $12.33B in 2024, with a positive free cash flow of $7.78B. The free cash flow growth rate is slightly negative, but the operating cash flow to net income ratio of 3.91 indicates efficient cash conversion. The free cash flow to net income ratio is 2.47, demonstrating solid cash generation capabilities. The slight decline in free cash flow growth is a minor concern.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
25.45B	23.83B	21.53B	18.06B	17.27B
	Gross Profit
13.55B	12.34B	10.87B	9.46B	9.27B
	EBIT
5.85B	4.83B	3.62B	3.76B	2.81B
	EBITDA
10.16B	12.17B	10.16B	9.84B	8.49B
	Net Income Common Stockholders
3.15B	2.84B	1.67B	2.96B	1.83B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.69B	5.04B	4.74B	9.80B	4.65B
	Total Assets
56.33B	55.26B	56.41B	49.82B	41.65B
	Total Debt
15.61B	16.03B	17.80B	12.91B	10.72B
	Net Debt
12.35B	12.95B	15.25B	7.68B	8.15B
	Total Liabilities
29.92B	29.24B	31.01B	24.71B	18.47B
	Stockholders Equity
26.40B	26.02B	25.40B	25.11B	23.18B
Cash Flow		Free Cash Flow
7.78B	7.92B	4.70B	4.79B	4.78B
	Operating Cash Flow
12.33B	12.42B	9.43B	12.76B	8.67B
	Investing Cash Flow
-4.95B	-4.68B	-8.62B	-9.37B	-5.29B
	Financing Cash Flow
-7.20B	-7.21B	-3.49B	-735.37M	-3.09B

TIM Technical Analysis

Technical Analysis Sentiment

Positive

Last Price15.31

Price Trends

50DMA

14.18

Positive

100DMA

13.02

Positive

200DMA

13.71

Positive

Market Momentum

MACD

0.30

Negative

RSI

61.50

Neutral

STOCH

76.66

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TIMB, the sentiment is Positive. The current price of 15.31 is above the 20-day moving average (MA) of 14.74, above the 50-day MA of 14.18, and above the 200-day MA of 13.71, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 61.50 is Neutral, neither overbought nor oversold. The STOCH value of 76.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TIMB.

TIM Risk Analysis

TIM disclosed 40 risk factors in its most recent earnings report. TIM 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

TIM 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	$7.44B	12.72	12.04%	3.52%	-0.91%	1.51%
VIV	77 Outperform	$13.93B	13.70	7.95%	2.68%	-0.47%	1.69%
SKM	76 Outperform	$8.63B	9.72	11.19%	4.98%	-2.34%	12.31%
TKC	75 Outperform	$5.34B	11.92	6.76%	2.55%	8.78%	-21.85%
KT	70 Outperform	$8.55B	25.87	3.02%	5.79%	-3.60%	-51.54%
TEF	64 Neutral	$27.79B	―	<0.01%	4.83%	1.18%	―
Sector *	58 Neutral	$12.88B	6.77	-2.53%	3.86%	2.36%	-36.74%

* Communication Services Sector Average

Performance Comparison

TIMB

TIM

15.31

-0.13

-0.84%

18.10

5.56

44.34%

SKM

Sk Telecom

22.90

2.41

11.76%

VIV

Telefonica Brasil

8.99

0.12

1.35%

TEF

Telefonica

5.02

0.90

21.84%

TKC

Turkcell Iletisim

6.11

0.42

7.38%

TIM Earnings Call Summary

Earnings Call Date: Feb 10, 2025 | % Change Since: 19.80% | Next Earnings Date: May 5, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong performance with significant growth in service revenue, mobile services, and EBITDA. The expansion of the 5G network and shareholder remuneration further support the positive outlook. However, challenges remain in the prepaid segment and fiber operations amid competitive pressures. The termination of the C6 Bank partnership introduces uncertainty, though it opens new opportunities. Overall, the highlights outweigh the lowlights, indicating a positive sentiment.

Highlights

Service Revenue Growth

Service revenue grew by 6.4% for the year, reaching the top of the guidance range, with a 5.1% growth in the fourth quarter.

Mobile Services Performance

Mobile services expanded by 6.6% compared to 2023, with postpaid rising close to 9% year-over-year.

EBITDA and Margin Expansion

EBITDA increased by 8% year-over-year with a margin expansion to 49.6%.

Operating Free Cash Flow Growth

Operating free cash flow grew close to 23% year-over-year, reaching more than 20% of revenue in 2024.

5G Network Expansion

5G coverage expanded across Brazil, covering more than 600 cities, 20% more than the second player, with 5G traffic more than doubling compared to last year.

Shareholder Remuneration

Shareholder remuneration reached BRL 3.5 billion with a yield of 10%.

ESG Initiatives

Partnership with Gerando Falcoes transformed Favela Marte into a fully connected 5G community, illustrating TIM's commitment to bridging the digital divide.

Lowlights

Challenges in Prepaid Segment

Prepaid segment under pressure due to migration to postpaid and a tougher comparative base in the fourth quarter.

Fiber Operations Pressure

Fiber operations are small, below 4% of revenues, and dilutive on free cash flow generation amid a highly competitive market.

C6 Bank Partnership Termination

Termination of the C6 Bank partnership, with the financial and economic impacts to be disclosed later, although it opens new opportunities in financial services.

Company Guidance

During TIM S.A.'s fourth quarter 2024 results call, the company reported strong financial and operational performance, with service revenue growth of 6.4%, driven by a 6.6% increase in mobile services, particularly postpaid, which rose nearly 9% year-over-year. The company achieved a robust EBITDA growth of 8% with a margin expansion, and operating free cash flow grew by close to 23%, reaching more than 20% of revenue. TIM's strategic focus on expanding 5G coverage and improving service quality was highlighted, with 5G traffic doubling and coverage reaching over 600 cities. Looking ahead, TIM set a new guidance for 2025-2027, emphasizing sustainable growth through mobile, B2B, efficiency, and broadband, alongside technological innovation and customer service improvements. The company also highlighted its commitment to shareholder returns, projecting a BRL 3.5 billion remuneration with a 10% yield, following a strong net income growth of over BRL 3 billion.

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.