Telecom Italia SpA

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TI : NYSE : Technology
$8.21 -0.20 | -2.40%
Today's Range: 8.18 - 8.45
Avg. Daily Volume: 150,200
09/29/16 - 1:29 PM ET

Financial Analysis


TELECOM ITALIA SPA's gross profit margin for the second quarter of its fiscal year 2016 has significantly increased when compared to the same period a year ago. Even though sales decreased, the net income has increased. TELECOM ITALIA SPA has weak liquidity. Currently, the Quick Ratio is 0.74 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.63% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)5042.065927.35
EBITDA ($mil)2160.151908.76
EBIT ($mil)1051.15662.91
Net Income ($mil)629.87-51.27


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)4181.137109.56
Total Assets ($mil)74933.7682232.87
Total Debt ($mil)36330.5839684.82
Equity ($mil)21077.7420535.63


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin42.8432.2
EBITDA Margin42.8432.2
Operating Margin20.8511.18
Sales Turnover0.270.28
Return on Assets1.351.12
Return on Equity6.15.4
Debt Q2 FY16 Q2 FY15
Current Ratio0.861.04
Debt/Capital0.630.66
Interest Expense1074.31914.89
Interest Coverage0.980.72


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1936.41933.5
Div / share0.00.0
EPS0.070.04
Book value / share10.8910.62
Institutional Own % n/a n/a
Avg Daily Volume176268.0282012.0

Valuation


SELL. The current P/E ratio indicates a premium compared to an average of 17.75 for the Diversified Telecommunication Services industry and a value on par with the S&P 500 average of 25.19. For additional comparison, its price-to-book ratio of 0.78 indicates a significant discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 4.07. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TI 23.61 Peers 17.75   TI 2.47 Peers 6.66

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

TI is trading at a significant premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

TI is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
TI 10.34 Peers 18.54   TI NM Peers 1.07

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

TI is trading at a premium to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

TI's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TI 0.78 Peers 4.07   TI -26.54 Peers 53.15

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

TI is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, TI is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TI 0.80 Peers 1.73   TI -12.19 Peers 8.37

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

TI is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

TI significantly trails its peers on the basis of sales growth

 

 

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