Telecom Italia SpA

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TI : NYSE : Technology
$9.53 -0.03 | -0.31%
Today's Range: 9.51 - 9.56
Avg. Daily Volume: 80500.0
09/21/17 - 3:57 PM ET

Financial Analysis


TELECOM ITALIA SPA's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. TELECOM ITALIA SPA has weak liquidity. Currently, the Quick Ratio is 0.82 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 15.87% 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 FY17 Q2 FY16
Net Sales ($mil)6159.645042.06
EBITDA ($mil)2571.652160.15
EBIT ($mil)1213.121051.15
Net Income ($mil)466.14629.87


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)6205.34181.13
Total Assets ($mil)78781.5474933.76
Total Debt ($mil)36282.4236330.58
Equity ($mil)24424.121077.74


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin41.7542.84
EBITDA Margin41.7442.84
Operating Margin19.6920.85
Sales Turnover0.270.27
Return on Assets1.851.34
Return on Equity5.991.91
Debt Q2 FY17 Q2 FY16
Current Ratio0.950.86
Debt/Capital0.60.63
Interest Expense1288.361074.31
Interest Coverage0.940.98


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)2106.721936.4
Div / share0.00.0
EPS0.20.04
Book value / share11.5910.89
Institutional Own % n/a n/a
Avg Daily Volume76974.093028.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 34.08 for the Diversified Telecommunication Services industry and a discount compared to the S&P 500 average of 24.88. For additional comparison, its price-to-book ratio of 0.80 indicates a significant discount versus the S&P 500 average of 3.10 and a significant discount versus the industry average of 3.46. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, TELECOM ITALIA SPA proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TI 21.14 Peers 34.08   TI 2.96 Peers 6.94

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

TI is trading at a significant discount 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 7.56 Peers 15.35   TI 0.64 Peers 0.66

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

TI is trading at a significant discount to its peers.

 

Average. 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 trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TI 0.80 Peers 3.46   TI 833.33 Peers 55.53

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.

 

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

TI is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TI 0.91 Peers 11.15   TI 5.78 Peers 0.91

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.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

TI has a sales growth rate that significantly exceeds its peers.

 

 

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