Quebecor (QBR.B) AI Stock Analysis

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Quebecor

(TSX:QBR.B)

79Outperform

Quebecor's stock is rated positively due to its strong financial performance and robust cash flow generation. Despite high leverage, the company effectively manages its financial obligations. The stock's technical indicators show favorable momentum, and its valuation appears attractive with a low P/E ratio and solid dividend yield. However, potential risks from regulatory challenges and pricing pressures in the telecommunications industry slightly temper the overall outlook.

Positive Factors

Dividend

Dividend raised 7.7% to $1.40, reflecting confidence in Quebecor's financial performance.

Financial Outlook

The company's attractive free cash flow profile and encouraging financial outlook contribute to a constructive view on the stock.

Market Share

Quebecor reported robust financial results ahead of expectations, with strong wireless market share gains.

Negative Factors

Cable Performance

Cable telecom service revenues fell 5.1% with internet posting a revenue decline of 4.3% due to sustained pricing battles.

Legacy Business Challenges

Quebecor’s legacy business in Quebec faces growth challenges given subscriber penetration levels and elevated competitive intensity.

Media Division

Media revenues were down -4.9% y/y, indicating challenges in the Media division.

Quebecor (QBR.B) vs. S&P 500 (SPY)

Market Cap

$8.09B

Dividend Yield3.76%

Average Volume (3M)1.39M

Price to Earnings (P/E)10.9

Beta (1Y)0.36

Revenue Growth3.76%

EPS Growth14.27%

CountryCA

Employees8,832

SectorCommunication Services

Sector Strength78

IndustryTelecommunications Services

Share Statistics

EPS (TTM)3.22

Shares Outstanding154,986,300

10 Day Avg. Volume1,121,483

30 Day Avg. Volume1,385,150

Financial Highlights & Ratios

PEG Ratio0.76

Price to Book (P/B)N/A

Price to Sales (P/S)2.04

Price to Cash Flow (P/CF)3.60

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

C$38.36

Price Target Upside8.82% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Quebecor Business Overview & Revenue Model

Company DescriptionQuebecor Inc. is a leading Canadian telecommunications and media company based in Montreal, Quebec. It operates in several key sectors, including telecommunications, entertainment, news media, and culture. The company's core products and services are offered through its subsidiaries, notably Videotron, which provides cable television, internet access, and mobile services, and TVA Group, which is involved in broadcasting and film production. Quebecor is also active in the media sector, publishing newspapers and magazines.

How the Company Makes MoneyQuebecor makes money primarily through its telecommunications services offered via Videotron, which includes subscription fees for cable television, internet, and mobile services. This constitutes a significant portion of the company's revenue. In addition to telecommunications, Quebecor generates revenue through advertising and subscription fees from its media operations under TVA Group, which includes television broadcasting, film production, and publishing. Partnerships with content providers and advertisers also play a critical role in enhancing its revenue streams. The company's diversified business model allows it to leverage synergies across its sectors, contributing to its overall earnings.

Quebecor Financial Statement Overview

Summary

Quebecor exhibits strong financial health with solid revenue growth and profitability. The company maintains robust margins and effective cost control. However, high leverage poses a potential risk, necessitating careful management of financial obligations. Cash flow generation remains strong, supporting ongoing operations and potential expansion.

Income Statement

Very Positive

Quebecor has demonstrated strong revenue growth with a 3.76% increase from 2023 to 2024. The gross profit margin is robust at 55.32%, indicating efficient cost management. However, the EBIT margin is notably absent for 2024, which could suggest operational challenges or accounting adjustments. Despite this, the net profit margin is healthy at 13.26%, reflecting effective bottom-line management.

Balance Sheet

Positive

The company's debt-to-equity ratio is relatively high at 3.71, indicating significant leverage. Despite this, the return on equity stands at 34.65%, showcasing strong profitability relative to equity. The equity ratio is moderate at 16.60%, highlighting a balanced capital structure with potential risks from high leverage.

Cash Flow

Very Positive

Operating cash flow has shown consistent growth, with a 17.60% increase from 2023 to 2024. The free cash flow to net income ratio is strong at 1.10, indicating efficient cash generation relative to net income. However, free cash flow has decreased by 8.70% compared to the previous year, which may impact future investments or debt repayments.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.64B	5.43B	4.53B	4.55B	4.32B
	Gross Profit
3.12B	2.99B	2.63B	2.66B	2.59B
	EBIT
0.00	1.33B	1.16B	1.19B	1.15B
	EBITDA
2.34B	2.18B	1.89B	1.89B	1.92B
	Net Income Common Stockholders
747.50M	650.50M	599.70M	578.40M	607.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
61.80M	11.10M	6.60M	64.70M	136.70M
	Total Assets
13.00B	12.74B	10.63B	10.76B	9.86B
	Total Debt
8.00B	8.17B	6.83B	6.86B	6.10B
	Net Debt
7.94B	8.16B	6.82B	6.79B	5.96B
	Total Liabilities
10.73B	10.90B	9.14B	9.38B	8.65B
	Stockholders Equity
2.16B	1.73B	1.36B	1.26B	1.11B
Cash Flow		Free Cash Flow
820.60M	898.90M	653.10M	-265.40M	778.40M
	Operating Cash Flow
1.72B	1.46B	1.26B	1.18B	1.43B
	Investing Cash Flow
-921.90M	-2.68B	-631.30M	-1.54B	-713.90M
	Financing Cash Flow
-712.20M	1.18B	-812.60M	281.90M	-602.00M

Quebecor Technical Analysis

Technical Analysis Sentiment

Positive

Last Price35.25

Price Trends

50DMA

34.54

Positive

100DMA

33.03

Positive

200DMA

32.53

Positive

Market Momentum

MACD

0.11

Positive

RSI

48.33

Neutral

STOCH

14.98

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:QBR.B, the sentiment is Positive. The current price of 35.25 is below the 20-day moving average (MA) of 35.86, above the 50-day MA of 34.54, and above the 200-day MA of 32.53, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 48.33 is Neutral, neither overbought nor oversold. The STOCH value of 14.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:QBR.B.

Quebecor Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QBR.B	79 Outperform	$8.09B	10.89	38.85%	3.76%	3.76%	14.27%
QBR.A	79 Outperform	C$8.09B	10.83	38.49%	3.79%	3.76%	14.27%
CCA	75 Outperform	$2.64B	8.03	10.84%	5.49%	0.21%	-6.81%
RCI.B	75 Outperform	$19.39B	10.78	16.66%	5.70%	6.71%	96.70%
T	67 Neutral	$31.12B	30.80	6.26%	7.68%	0.67%	15.00%
BCE	61 Neutral	$27.30B	165.70	1.80%	13.25%	-1.07%	-92.15%
Sector *	59 Neutral	$13.83B	7.37	-0.59%	3.89%	2.56%	-39.63%

* Communication Services Sector Average

Performance Comparison

TSE:QBR.B

Quebecor

35.25

7.13

25.34%

TSE:T

Telus

20.46

0.24

1.21%

TSE:BCE

BCE

29.67

-10.66

-26.44%

TSE:CCA

Cogeco Communications

65.22

11.91

22.33%

TSE:RCI.B

Rogers Communication

34.84

-15.19

-30.36%

TSE:QBR.A

Quebecor Inc Cl A MV

35.44

7.49

26.80%

Quebecor Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: 8.05% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Positive

Quebecor demonstrated strong financial performance with significant cash flow and EBITDA growth, supported by impressive wireless subscriber gains and improved customer satisfaction. However, regulatory challenges and competitive pricing pressures present ongoing risks, particularly in the wireline and media segments.

Highlights

Record Cash Flow and EBITDA Growth

Cash flow increased by 17% in Q4 and 18% for the full year 2024. EBITDA grew by 4% in Q4 and 6% for the year, reflecting strong financial performance despite competitive challenges.

Strong Wireless Subscriber Growth

Quebecor added 88,000 net new wireless lines in Q4 2024 and 373,000 for the year, achieving a 10% year-over-year growth in wireless subscribers, reaching over 4.1 million total subscribers.

Improved Customer Satisfaction

Videotron, Fizz, and Freedom Mobile achieved top rankings in customer satisfaction surveys, with significant reductions in customer complaints and maintaining the lowest churn rate in the industry.

Investment in Network and Technology

Quebecor expanded its wireless network with 180 new sites and announced plans to build 37 new infrastructures, while also launching 5G+ technology access for all Freedom Mobile plans.

Media Segment EBITDA Improvement

TVA Group's adjusted EBITDA improved significantly by $17 million compared to the previous year, driven by the return of major productions and restructuring efforts.

Lowlights

Regulatory Challenges

Quebecor faces regulatory challenges with CRTC's pricing decisions, which are seen as unfavorable compared to competitors like TELUS, affecting market competitiveness in Western Canada.

Pressure on ARPU

Consolidated wireless ARPU decreased by $1.93 to $34.36 in Q4, primarily due to promotional discounts and competitive pricing pressures from the Big 3 telecom operators.

Wireline Subscriber Base Decline

Quebecor's Internet customer base declined by 2,000 in Q4, despite a year-over-year growth of 5,000, highlighting the competitive pressures in the wireline market.

Challenges in Media Advertising Revenue

Continued decline in advertising revenues in the Media segment, consistent with global industry trends, despite improvements in operating results.

Company Guidance

During the Quebecor Inc. conference call discussing the financial results for the fourth quarter and full year of 2024, several key metrics were highlighted. Quebecor reported a 17% increase in cash flow for Q4 and an 18% increase for the entire year. EBITDA grew by 4% in Q4 and 6% for the year, demonstrating strong profitability. The leverage ratio decreased to 3.31x, marking the lowest among the top four telecom operators in Canada. The company also achieved significant growth in wireless subscribers, ending the year with 373,000 net new lines, a 10% increase year-over-year, bringing the total to over 4.1 million subscribers. Despite these achievements, the average revenue per user (ARPU) decreased by $1.93 to $34.36 in Q4, mainly due to the dilutive impact of Freedom Mobile's prepaid services and aggressive pricing strategies from competitors. The company also announced a quarterly dividend increase to $0.35 per share, reflecting an 8% rise. Quebecor's disciplined capital allocation strategy allowed it to reduce its debt, maintain a solid balance sheet, and continue investing in network expansions and customer service improvements.

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.