Bezeq (BEZQ) AI Stock Analysis

• Market Cap: ₪22.45B
• Dividend Yield: 5%
• Average Volume (3M): 8.74M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.66
• Revenue Growth: -2.17%
• EPS Growth: 25.51%
• Country: IL
• Employees: 5,425
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 16.00
• Shares Outstanding: 2,775,018,300
• 10 Day Avg. Volume: 5,525,810
• 30 Day Avg. Volume: 8,741,070
• PEG Ratio: -1.17
• Price to Book (P/B): 5.83
• Price to Sales (P/S): 1.64
• P/FCF Ratio: 8.58
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: 911.00 ▲(42.34% Upside)

Bezeq's overall stock score is driven by strong earnings call results and a solid valuation, supported by a reasonable P/E ratio and attractive dividend yield. Technical analysis indicates a positive trend, while financial performance shows strong profitability but is offset by high leverage and negative revenue growth.

Positive Factors

High gross and operating margins

Bezeq's very high gross margin and healthy EBIT/EBITDA margins reflect durable cost structure and service mix advantages (fixed broadband, wholesale, content). Sustained margin strength supports internal funding for investment and dividends even if top-line growth slows.

Completed fiber rollout and 5G scale-up

Network completion (2.9m homes passed) and near‑million fiber subs plus 1.36m 5G plans create structural competitive advantage. Lower incremental CapEx from 2026 and higher ARPU potential support sustainable cash generation and defendable market share vs. smaller rivals.

Positive free cash flow trends

Improving free cash flow growth and an operating cash flow to net income ratio near 0.7 indicate solid cash conversion. This enhances financial flexibility to service debt, fund fiber/5G upgrades, and maintain dividends, reducing dependency on external financing over the medium term.

Negative Factors

High leverage

A debt-to-equity ratio above 3x denotes material leverage and limits financial flexibility. Elevated interest and refinancing risk can constrain capital allocation, raise financing costs, and amplify earnings sensitivity to macro shocks, making long-term investment and payout policies riskier.

Negative revenue growth trend

Sustained negative revenue growth signals challenges in expanding top-line across legacy fixed-line services. Even with margin strength, revenue contraction pressures long-term EBITDA growth and makes achievement of profit expansion reliant on ARPU gains, cost cuts, or successful upselling to fiber/5G customers.

Operational and one-off cash drains

Tax assessments and higher provisions for legal claims/retirement are structural cost and cash risks. Recurring or large one-off liabilities can depress free cash flow, force higher provisions, and reduce available funds for investment or deleveraging, weakening medium-term balance sheet repair prospects.

Bezeq Business Overview & Revenue Model

Company Description

Bezeq (BEZQ) is Israel's largest telecommunications provider, offering a comprehensive range of services including fixed-line telephony, broadband internet, television broadcasting, and mobile communications. The company operates through several segments, including Bezeq International, which provides international telecommunication services, and yes, which offers television services. Bezeq is a key player in the Israeli telecommunications market and aims to enhance connectivity and digital services for individuals and businesses alike.

How the Company Makes Money

Bezeq primarily generates revenue through multiple streams, including fixed-line services, broadband internet subscriptions, mobile services, and television subscriptions. The company benefits from a large customer base in Israel, providing essential communication services that are essential for both residential and business customers. Key revenue streams include monthly subscription fees from customers, pay-per-view services from its television arm, and international calling services through Bezeq International. Additionally, Bezeq has formed strategic partnerships with content providers and technology companies to enhance its service offerings, further contributing to its revenue through bundled services and promotional deals.

Bezeq Financial Statement Overview

Summary

Bezeq demonstrates strong profitability and operational efficiency with a high gross profit margin and healthy EBIT and EBITDA margins. However, challenges include negative revenue growth and high leverage, as indicated by a high debt-to-equity ratio. Cash flow management is good, but there is room for improvement in cash conversion.

Income Statement

Bezeq's income statement shows a strong gross profit margin of 84.79% in TTM, indicating efficient cost management. However, the net profit margin is moderate at 13.84%, and the revenue growth rate is negative at -1.01%, suggesting challenges in expanding revenue. EBIT and EBITDA margins are healthy, reflecting good operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.32 in TTM, indicating significant leverage, which could pose financial risk. The return on equity is robust at 46.69%, showing effective use of equity to generate profits. The equity ratio is low, suggesting a reliance on debt financing.

Cash Flow

Cash flow analysis shows a positive free cash flow growth rate of 5.21% in TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.71, suggesting adequate cash flow relative to net income. However, the free cash flow to net income ratio is moderate at 0.48, indicating room for improvement in cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.72B	8.88B	9.10B	9.03B	8.82B	8.72B
Gross Profit	6.37B	7.44B	7.17B	7.50B	7.30B	7.20B
EBITDA	3.83B	3.58B	3.70B	3.46B	3.71B	3.22B
Net Income	1.38B	1.07B	1.19B	1.00B	1.18B	796.00M
Balance Sheet
Total Assets	15.79B	15.16B	13.88B	13.41B	13.93B	13.24B
Cash, Cash Equivalents and Short-Term Investments	2.88B	2.69B	1.76B	1.64B	1.93B	1.56B
Total Debt	9.48B	9.61B	9.00B	9.18B	10.04B	10.31B
Total Liabilities	13.08B	12.66B	11.68B	11.79B	12.84B	13.39B
Stockholders Equity	2.71B	2.50B	2.20B	1.62B	1.10B	-150.00M
Cash Flow
Free Cash Flow	1.55B	1.70B	1.75B	1.80B	1.15B	1.72B
Operating Cash Flow	3.01B	3.45B	3.46B	3.50B	2.84B	3.22B
Investing Cash Flow	-1.41B	-2.30B	-1.88B	-1.58B	-1.65B	-839.00M
Financing Cash Flow	-1.92B	-895.00M	-1.75B	-2.15B	-1.06B	-1.94B

Bezeq Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 640.00
• 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 IL:BEZQ, the sentiment is Positive. The current price of 640 is below the 20-day moving average (MA) of 758.69, below the 50-day MA of 714.40, and above the 200-day MA of 622.32, indicating a bullish trend. The MACD of 27.19 indicates Negative momentum. The RSI at 77.19 is Negative, neither overbought nor oversold. The STOCH value of 91.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:BEZQ.

Bezeq Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BEZQ	75 Outperform	₪22.45B	16.20	54.58%	5.00%	-2.17%	25.51%
CEL	74 Outperform	₪6.34B	24.70	9.92%	3.18%	-4.33%	67.49%
PTNR	72 Outperform	₪7.12B	23.17	―	3.49%	-3.73%	37.55%
GLTL	72 Outperform	₪151.32M	11.12	―	―	-5.29%	13.82%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%