Swisscom AG (SCMN) AI Stock Analysis

• Market Cap: CHF34.27B
• Dividend Yield: 3.87%
• Average Volume (3M): 52.40K
• Price to Earnings (P/E): 27.5
• Beta (1Y): 0.25
• Revenue Growth: 27.12%
• EPS Growth: -25.85%
• Country: CH
• Employees: 23,717
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 7.01
• Shares Outstanding: 51,801,945
• 10 Day Avg. Volume: 55,748
• 30 Day Avg. Volume: 52,402
• PEG Ratio: -1.72
• Price to Book (P/B): 2.15
• Price to Sales (P/S): 2.37
• P/FCF Ratio: 15.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: CHF565.17
• Price Target Upside: -11.21% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: CHF687.00 ▲(7.93% Upside)

Swisscom AG's overall stock score reflects strong financial performance and a solid dividend yield, offset by bearish technical indicators and challenges highlighted in the earnings call. The company's strategic focus on AI and digitalization is promising, but current market conditions and competitive pressures pose risks.

Positive Factors

Balance Sheet Strength

Moderate leverage (D/E 0.32) and a strong equity ratio provide durable financial flexibility for network capex, spectrum purchases and M&A. This capital structure supports consistent investment in infrastructure while preserving the ability to sustain dividends and absorb shocks.

Cash Generation

Positive FCF growth (7.22%) and healthy OCF-to-net-income conversion indicate the business converts earnings to cash reliably. That supports ongoing 5G, fiber rollouts, digitalization investments and shareholder returns without overreliance on external financing.

Network & Wholesale Position

Rapid fiber adoption and wholesale net adds show strong network competitiveness and diversified revenue streams. High fiber penetration underpins durable service quality, limits churn, and enables monetizing infrastructure via wholesale contracts and B2B offerings over time.

Negative Factors

Italian Service Revenue Decline

A structural service revenue shortfall >€200m in Italy signals deep competitive pressure and longer-term demand erosion. Sustained revenue declines in a major market impair scale economics, compress margins and complicate funding of integration and growth initiatives.

Customer Losses in Italy

Significant negative mobile net adds indicate scale erosion in Italy, raising unit costs and reducing ARPU over time. Persistent subscriber losses undermine long-run revenue stability, hamper cross-sell of fixed and broadband services, and weaken market positioning versus rivals.

B2B ARPU Erosion

Declining B2B ARPU from intense price competition exerts durable pressure on margins and lifetime customer value. For an operator reliant on enterprise services for higher-margin revenues, sustained ARPU erosion will challenge profitability and require structural cost or product differentiation remedies.

Swisscom AG Business Overview & Revenue Model

Company Description

Swisscom AG provides telecommunication services primarily in Switzerland, Italy, and internationally. It operates through three segments: Swisscom Switzerland, Fastweb, and Other Operating. The company offers mobile and fixed-network services, such as telephony, broadband, TV, and mobile offerings, as well as sells terminal equipment; and telecom and communications solutions for large corporations and small and medium-sized enterprises. It also provides cloud, outsourcing, workplace, mobile phone, networking, business process optimization, SAP, and security and authentication solutions, as well as a range of services to the banking industry; Internet of Things solutions; digitization services to the healthcare sector; IT systems for health insurance companies; fixed-line and mobile networks by other telecommunication service providers; and roaming to foreign operators whose customers use its mobile networks, as well as broadband services and regulated products. In addition, the company plans, operates, and maintains network infrastructure and IT systems; provides support functions to finance, human resource, and strategy, as well as management of real estate and vehicle fleet; and offers broadband and mobile services, such as telephony, mobile offerings, and broadband services, as well as ICT solutions for residential, business, and wholesale customers. Further, it provides IT and network services; online and telephone directories; and cross-platform retail media and security communication services, as well as builds and maintains wired and wireless networks. The company was founded in 1852 and is based in Bern, Switzerland.

How the Company Makes Money

Swisscom generates revenue primarily through its telecommunications services, which include mobile subscriptions, fixed-line voice and broadband services, and digital television offerings. The company earns significant income from mobile service contracts and data plans, which attract a large customer base. Additionally, Swisscom provides IT and cloud services to enterprises, creating another key revenue stream. The company has established partnerships with various technology firms to enhance its service offerings and expand its market reach. Furthermore, Swisscom's investments in infrastructure and innovation, including 5G technology and smart city solutions, contribute to its competitive edge and long-term profitability.

Swisscom AG Financial Statement Overview

Summary

Swisscom AG exhibits strong financial health with robust revenue growth and stable profitability. The balance sheet is well-managed with moderate leverage and a strong equity base. Cash flow generation is improving, though there is room for enhanced efficiency. The company is well-positioned in the telecommunications industry, with a solid financial foundation to support future growth.

Income Statement

Swisscom AG has demonstrated strong revenue growth of 7.75% in the TTM, indicating robust demand for its services. The gross profit margin remains healthy at 69.22%, though it has decreased from previous years. The net profit margin is stable at 10.22%, reflecting consistent profitability. However, the EBIT margin has slightly decreased, suggesting increased operating expenses. Overall, the income statement shows a positive growth trajectory with stable profitability.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.32, indicating a balanced approach to leveraging. Return on equity is solid at 11.04%, though it has decreased from previous years, suggesting a slight decline in efficiency. The equity ratio is strong, reflecting a solid capital structure. Overall, the balance sheet is stable with manageable leverage and a strong equity position.

Cash Flow

Swisscom AG's free cash flow growth rate is positive at 7.22%, indicating improved cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion. However, the free cash flow to net income ratio is moderate, indicating room for improvement in cash flow management. Overall, the cash flow statement reflects a stable cash position with potential for enhanced efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.04B	11.04B	11.07B	11.05B	11.18B	11.10B
Gross Profit	9.16B	8.72B	8.81B	8.96B	9.00B	8.90B
EBITDA	5.98B	4.46B	4.55B	4.46B	4.71B	4.35B
Net Income	1.25B	1.54B	1.71B	1.60B	1.83B	1.53B
Balance Sheet
Total Assets	35.57B	37.21B	24.75B	24.62B	24.80B	24.26B
Cash, Cash Equivalents and Short-Term Investments	193.00M	1.59B	198.00M	185.00M	494.00M	510.00M
Total Debt	16.44B	3.64B	1.92B	1.91B	2.02B	1.99B
Total Liabilities	23.60B	25.06B	13.13B	13.45B	13.99B	14.77B
Stockholders Equity	11.97B	12.15B	11.62B	11.17B	10.81B	9.49B
Cash Flow
Free Cash Flow	2.64B	1.69B	1.76B	1.59B	1.77B	1.88B
Operating Cash Flow	5.35B	3.98B	4.03B	3.88B	4.04B	4.07B
Investing Cash Flow	-7.94B	-9.28B	-2.32B	-2.43B	-2.12B	-2.23B
Financing Cash Flow	-489.00M	6.82B	-1.67B	-1.72B	-1.86B	-1.82B

Swisscom AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 636.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SCMN, the sentiment is Positive. The current price of 636.5 is above the 20-day moving average (MA) of 610.50, above the 50-day MA of 585.84, and above the 200-day MA of 574.98, indicating a bullish trend. The MACD of 17.34 indicates Negative momentum. The RSI at 86.65 is Negative, neither overbought nor oversold. The STOCH value of 92.67 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:SCMN.

Swisscom AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SCMN	67 Neutral	CHF34.27B	27.46	―	3.87%	27.12%	-25.85%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
SUNN	52 Neutral	CHF3.29B	―	―	7.96%	―	―