Deutsche Telekom (DTE) AI Stock Analysis

• Market Cap: €134.40B
• Dividend Yield: 3.28%
• Average Volume (3M): 5.77M
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.39
• Revenue Growth: 3.58%
• EPS Growth: 103.26%
• Country: DE
• Employees: 198,194
• Sector: Services
• Sector Strength: N/A
• Industry: Telecommunications Services
• EPS (TTM): 0.55
• Shares Outstanding: 4,905,190,400
• 10 Day Avg. Volume: 4,630,876
• 30 Day Avg. Volume: 5,765,601
• PEG Ratio: -0.35
• Price to Book (P/B): 2.25
• Price to Sales (P/S): 1.24
• P/FCF Ratio: 6.89
• 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: €37.38
• Price Target Upside: 36.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: €29.00 ▲(5.53% Upside)

Deutsche Telekom's strong financial performance and attractive valuation are offset by bearish technical indicators. The company's robust revenue growth and profitability, along with a low P/E ratio and high dividend yield, are positive factors. However, the stock's current bearish momentum and oversold technical conditions present risks.

Positive Factors

AI Infrastructure Expansion

The construction of a major AI factory in partnership with NVIDIA strengthens Deutsche Telekom's position in AI infrastructure, enhancing its technological capabilities and offering new revenue streams in a growing market.

Revenue Growth

Consistent revenue growth indicates robust demand for Deutsche Telekom's services, supporting its market position and potential for future expansion.

Profitability

Sustained profitability through healthy margins demonstrates operational efficiency, providing a stable foundation for long-term financial health.

Negative Factors

High Leverage

High leverage poses risks to financial stability, potentially limiting flexibility in investment and increasing vulnerability to interest rate changes.

Decreased Net Profit Margin

A declining net profit margin may indicate rising costs or competitive pressures, which could affect future profitability if not addressed.

Moderate Free Cash Flow Growth

Limited growth in free cash flow may constrain the company's ability to invest in new opportunities or return capital to shareholders, impacting long-term growth potential.

Deutsche Telekom Business Overview & Revenue Model

Company Description

Deutsche Telekom AG, together with its subsidiaries, provides integrated telecommunication services. The company operates through five segments: Germany, United States, Europe, Systems Solutions, and Group Development. It offers fixed-network services, including voice and data communication services based on fixed-network and broadband technology; and sells terminal equipment and other hardware products, as well as services to resellers. The company also provides mobile voice and data services to consumers and business customers; sells mobile devices and other hardware products; and sells mobile services to resellers and to companies that purchases and markets network services to third parties, such as mobile virtual network operators. In addition, it offers internet services; internet-based TV products and services; and information and communication technology systems for multinational corporations and public sector institutions with an infrastructure of data centers and networks under the T-Systems brand, as well as call center services. The company has 242 million mobile customers and 22 million broadband customers, as well as 27 million fixed-network lines. Deutsche Telekom AG has a collaboration with VMware, Inc. on cloud-based open and intelligent virtual RAN platform to bring agility to radio access networks for existing LTE and future 5G networks; and partnership with Microsoft to deliver high-performance cloud computing experiences. The company was founded in 1995 and is headquartered in Bonn, Germany.

How the Company Makes Money

Deutsche Telekom generates revenue through several key streams, primarily from its mobile and fixed-line telecommunications services. The company earns money by providing voice and data services to individual consumers and businesses, including mobile subscriptions, broadband internet, and television services. Additionally, Deutsche Telekom benefits from offering IT and cloud services, which have become increasingly important in the digital age. The company's revenue model is also bolstered by partnerships with other technology and telecom companies, enabling it to offer bundled services and expand its market reach. Furthermore, Deutsche Telekom has significant investments in infrastructure, allowing it to capitalize on the growing demand for high-speed internet and mobile connectivity. The company's strategic focus on digital transformation and innovation also contributes to its earnings by creating new revenue opportunities in IoT (Internet of Things) and smart solutions.

Deutsche Telekom Financial Statement Overview

Summary

Deutsche Telekom exhibits strong financial performance with robust revenue growth and profitability. The company effectively utilizes equity to generate returns despite high leverage. Cash flow management is stable, supporting its growth and operational needs.

Income Statement

Deutsche Telekom shows strong revenue growth with a 16.16% increase in TTM, supported by a solid gross profit margin of 73.48%. The net profit margin is healthy at 7.37%, although it has decreased from previous years. EBIT and EBITDA margins remain robust, indicating efficient operations. Overall, the income statement reflects a positive growth trajectory and profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.34, indicating significant leverage, which could pose risks if not managed carefully. However, the return on equity is strong at 20.57%, suggesting effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure. While the company is leveraging debt, it maintains a solid return on equity.

Cash Flow

Cash flow analysis shows a modest free cash flow growth of 1.56% in TTM, with a healthy operating cash flow to net income ratio of 1.11. The free cash flow to net income ratio is 0.52, indicating good cash generation relative to net income. The company demonstrates stable cash flow management, supporting its operational and financial activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	198.70B	115.11B	111.97B	114.20B	107.61B	101.00B
Gross Profit	153.09B	70.37B	25.21B	18.88B	16.43B	15.35B
EBITDA	54.61B	53.74B	44.52B	43.08B	38.95B	38.21B
Net Income	12.07B	11.21B	17.79B	8.00B	4.18B	4.16B
Balance Sheet
Total Assets	287.20B	328.29B	313.44B	321.03B	299.47B	282.31B
Cash, Cash Equivalents and Short-Term Investments	5.75B	8.48B	7.28B	5.77B	7.62B	12.94B
Total Debt	139.33B	146.46B	140.82B	147.16B	142.07B	137.26B
Total Liabilities	195.56B	229.65B	222.21B	233.71B	218.00B	209.76B
Stockholders Equity	60.95B	63.30B	56.92B	48.56B	42.68B	35.92B
Cash Flow
Free Cash Flow	21.45B	20.70B	19.43B	11.71B	5.81B	5.05B
Operating Cash Flow	40.84B	39.87B	37.30B	35.82B	32.17B	23.74B
Investing Cash Flow	-23.79B	-18.90B	-22.91B	-22.31B	-27.40B	-22.65B
Financing Cash Flow	-22.98B	-20.28B	-12.83B	-15.44B	-10.78B	7.56B

Deutsche Telekom Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 27.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:DTE, the sentiment is Neutral. The current price of 27.48 is above the 20-day moving average (MA) of 27.24, below the 50-day MA of 27.64, and below the 200-day MA of 30.39, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 53.62 is Neutral, neither overbought nor oversold. The STOCH value of 91.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:DTE.

Deutsche Telekom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FNTN	75 Outperform	€3.48B	12.90	18.42%	6.73%	-0.62%	16.87%
RRTL	69 Neutral	€5.24B	14.59	6.17%	6.31%	2.77%	-31.49%
DTE	67 Neutral	€134.40B	11.14	20.18%	3.28%	3.58%	103.26%
1U1	65 Neutral	€4.27B	33.62	2.07%	0.21%	-0.46%	-50.77%
UTDI	62 Neutral	€5.04B	35.67	2.15%	7.04%	-2.19%	―
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%