Swisscom AG (SCMN) AI Stock Analysis

• Market Cap: CHF37.37B
• Dividend Yield: 3.87%
• Average Volume (3M): 52.40K
• Price to Earnings (P/E): 29.4
• Beta (1Y): 0.27
• Revenue Growth: 27.12%
• EPS Growth: -25.85%
• Country: CH
• Employees: 23,717
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 5.44
• Shares Outstanding: 51,801,945
• 10 Day Avg. Volume: 55,748
• 30 Day Avg. Volume: 52,402
• PEG Ratio: -1.34
• Price to Book (P/B): 2.44
• Price to Sales (P/S): 1.98
• P/FCF Ratio: 9.92
• 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: CHF592.50
• Price Target Upside: -17.88% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6
• EPS Forecast (FY): 26.51
• Revenue Forecast (FY): CHF14.82B

• Rating: 67 Neutral
• Price Target: CHF762.00 ▲(5.61% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid, cash-generative financials (strong margins and improving free cash flow), but it is held back by weakening profitability trends and higher leverage. Technicals are bullish but appear overextended, and valuation looks rich (P/E ~29) despite a moderate dividend yield. Earnings guidance supports stability and cash flow improvement, though continued service-revenue declines and acquisition-related cost headwinds limit upside.

Positive Factors

Improving cash generation

Swisscom's materially improved operating cash flow (CHF 6.01bn) and FCF growth (+13.7% to CHF 3.00bn) create durable financial flexibility. Strong cash generation supports dividends, fiber and 5G capex, deleveraging and integration costs, insulating fundamentals despite service revenue pressure.

Network scale & low churn

Broad FTTH and 5G coverage plus low churn and high NPS underpin a durable competitive moat. Network scale supports premium service positioning, wholesale monetization and lower customer acquisition costs, helping stabilize ARPU extraction and long-term EBITDA even as base services evolve.

Italy integration & synergy delivery

Synergies from the Italy deal are tracking ahead, with meaningful run‑rate targets through 2029. Successful integration capacity translates into structural cost and revenue upside, improving group margins and accelerating cash flow conversion over multiple years as incremental synergies materialize.

Negative Factors

Telco service revenue erosion (CH)

Ongoing service‑revenue decline in Switzerland (B2C and B2B) reflects structural ARPU pressure and substitution. Persistent top‑line erosion constrains organic EBITDA growth, forcing reliance on cost cuts, wholesale monetization or M&A to sustain margins over the medium term.

Rising leverage and weaker ROE

Material increase in debt and declining ROE reduce capital efficiency and raise sensitivity to financing costs. Elevated leverage tied to acquisitions limits strategic optionality, increases interest expense burdens and amplifies the earnings drag from non‑cash acquisition charges over several years.

Promotional/ARPU & B2B migration pressure

Persistent promotional competition and technology migration (MPLS→SD‑WAN) are structurally compressing ARPU and raising churn risk. This trend limits the pace of revenue recovery, forces margin dilution in B2B segments and complicates sustainable ARPU normalization over the next several quarters.

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

Defensive telecom fundamentals with strong margins and improving latest free cash flow (2025 OCF 6.01B; FCF 3.00B, +13.7%). Offsetting this are multi-year net income softness (2021–2024) with a further drop in 2025, rising debt in 2024–2025, and softened ROE (~17% in 2021 to ~12.7% in 2024).

Income Statement

Profitability is solid for a telecom, with consistently strong gross profitability (~79–81%) and healthy operating profitability (EBITDA margin ~39–42% from 2020–2024). However, earnings have been drifting down from 2021–2024 (net income 1.83B to 1.54B), and 2024 revenue was essentially flat. 2025 shows a sharp revenue step-up (+7.2%), but net income fell to 1.27B versus 2024, suggesting margin pressure or higher costs below the operating line.

Balance Sheet

Leverage remains manageable with debt below equity in recent years (2024 debt-to-equity ~0.30), and equity has been broadly stable to slightly up. The main watch-out is debt rising versus 2022–2023 (about 1.9B to ~3.6–3.7B in 2024–2025), while returns on equity have softened from ~17% (2021) to ~12.7% (2024), pointing to slightly weaker capital efficiency.

Cash Flow

Cash generation is strong and improving in the latest period: operating cash flow rose to 6.01B in 2025 and free cash flow increased to 3.00B (+13.7%). That said, conversion has been mixed historically—2024 operating cash flow covered only ~53% of net income and free cash flow was ~42% of net income, weaker than prior years when cash coverage was closer to ~0.90–0.98—indicating periodic working-capital or investment swings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.05B	11.04B	11.07B	11.05B	11.18B
Gross Profit	12.03B	8.72B	8.81B	8.96B	9.00B
EBITDA	6.62B	4.46B	4.55B	4.46B	4.71B
Net Income	1.27B	1.54B	1.71B	1.60B	1.83B
Balance Sheet
Total Assets	36.02B	37.21B	24.75B	24.62B	24.80B
Cash, Cash Equivalents and Short-Term Investments	856.00M	1.59B	198.00M	185.00M	494.00M
Total Debt	3.73B	3.64B	1.92B	1.91B	2.02B
Total Liabilities	23.79B	25.06B	13.13B	13.45B	13.99B
Stockholders Equity	12.24B	12.15B	11.62B	11.17B	10.81B
Cash Flow
Free Cash Flow	3.00B	1.69B	1.76B	1.59B	1.77B
Operating Cash Flow	6.01B	3.98B	4.03B	3.88B	4.04B
Investing Cash Flow	-3.52B	-9.28B	-2.32B	-2.43B	-2.12B
Financing Cash Flow	-3.75B	6.82B	-1.67B	-1.72B	-1.86B

Swisscom AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 721.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

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 721.5 is above the 20-day moving average (MA) of 686.17, above the 50-day MA of 628.30, and above the 200-day MA of 587.97, indicating a bullish trend. The MACD of 26.06 indicates Positive momentum. The RSI at 78.92 is Negative, neither overbought nor oversold. The STOCH value of 78.63 is Neutral, 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	CHF37.37B	29.41	―	3.87%	27.12%	-25.85%
SUNN	61 Neutral	CHF3.58B	-31.66	―	7.96%	―	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%