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Nippon Telegraph and Telephone Corporation (JP:9432)
:9432

Nippon Telegraph and Telephone (9432) AI Stock Analysis

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Nippon Telegraph and Telephone

(OTC:9432)

Rating:80Outperform
Price Target:
¥182.00
▲(14.83%Upside)
Nippon Telegraph and Telephone demonstrates strong financial performance with consistent revenue growth and solid profitability, which is the most significant factor. Technical analysis shows positive momentum, although there are signs of a potential overbought condition. The valuation is reasonable with a fair P/E ratio and a healthy dividend yield, making it attractive for income investors.

Nippon Telegraph and Telephone (9432) vs. iShares MSCI Japan ETF (EWJ)

Nippon Telegraph and Telephone Business Overview & Revenue Model

Company DescriptionNippon Telegraph and Telephone Corporation (NTT) is a leading Japanese telecommunications company, headquartered in Tokyo. It operates in various sectors including fixed-line and mobile communications, network services, and system integration. NTT provides a wide range of products and services, such as voice communication, internet services, data communications, and IT solutions, catering to both individual and corporate clients globally.
How the Company Makes MoneyNTT generates revenue through multiple streams, primarily from its telecommunications services. The company earns a substantial portion of its income from mobile communications, which includes voice calls, data services, and related products. Fixed-line communications, offering traditional telephone services and broadband internet, also contribute significantly to its earnings. Additionally, NTT's network services and system integration segments provide IT infrastructure, data centers, and cloud services, driving further revenue. Key partnerships with technology firms and enterprises enhance its service offerings and expand its market reach, supporting its financial performance.

Nippon Telegraph and Telephone Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q3-2024)
|
% Change Since: 6.45%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there are positive developments in global solutions and Smart Life Business, the company faces significant challenges with declining profits and intense market competition affecting several key segments.
Q3-2024 Updates
Positive Updates
Record High Operating Revenue
Operating revenue increased by JPY332.9 billion, reaching a record high of JPY10,049.7 billion for the third quarter due to a boost in domestic and global revenue.
Growth in Smart Life Business
Smart Life Business at Docomo contributed to the increase in operating revenue, with a focus on expanding finance and payment segments.
Global Solution Business Segment Growth
Operating profit increased year-on-year due to higher sales in public, financial, and corporate sectors in Japan, as well as increased income from the data center business overseas.
Expansion in Data Center and Urban Solutions
Year-on-year growth in sales and profit for the Other business segment due to the expansion of data center engineering and NTT Urban solutions.
Negative Updates
Decrease in Operating Profit
Operating profit decreased by JPY87 billion, reaching JPY1,399.2 billion, due to a decline in communication service revenues and the impact of slowing down non-core assets.
Significant Decline in Profit
Profit fell by JPY160.4 billion year-on-year due to declining operating profit and rebound from gains on stock sales from the previous year.
Challenges in Integrated ICT Business
Despite growth in Smart Life Business, overall profit declined due to measures to strengthen the customer base and a decline in mobile communication service revenue.
Intense Competition Affecting ARPU
The consumer communication segment faced challenges with lower-than-expected ARPU and increased marketing expenses to maintain market share.
Enterprise Business Struggles
The enterprise section of Integrated ICT business experienced weaker profitability, with challenges in SME market growth and slower growth in large companies.
Impact of Inflation and Market Competition
Market conditions, including inflation and intense competition, have made it challenging to realize the expected growth in telecommunications business.
Company Guidance
During the call, NTT provided guidance on their financial results for the third quarter of fiscal year 2024, noting a record high operating revenue of JPY10,049.7 billion, an increase of JPY332.9 billion year-on-year, largely driven by domestic and global revenue growth, particularly from the Smart Life Business at Docomo. However, operating profit decreased by JPY87 billion to JPY1,399.2 billion due to declines in communication service revenues in mobile and fixed-line segments and measures to strengthen Docomo's customer base. Profit also fell by JPY160.4 billion to JPY850.7 billion, influenced by a rebound from gains on stock sales the previous year. EBITDA was reported at JPY2,552.5 billion, down JPY19.2 billion. The company highlighted challenges in achieving annual profit targets but emphasized ongoing efforts to enhance marketing and cost reduction initiatives. Additionally, they discussed segment-specific performances, including the Integrated ICT business, Regional Communication Business, and Global Solution business, each facing unique challenges and growth opportunities. Looking ahead, NTT expressed commitment to regional revitalization and urban development initiatives, expansion of their data center business, and participation in global events, such as the Mobile World Congress.

Nippon Telegraph and Telephone Financial Statement Overview

Summary
Nippon Telegraph and Telephone presents a robust financial profile with strong profitability and efficient operations. The income statement reflects consistent revenue growth and high margins, while the balance sheet demonstrates a stable capital structure with moderate leverage. Cash flow management shows strong operating cash flow, but the negative free cash flow growth highlights challenges in capital expenditure management. Overall, the company's financial health is strong, with areas for improvement in cash flow efficiency.
Income Statement
85
Very Positive
The company maintained a healthy gross profit margin of 19.2% TTM, and its net profit margin stood at 8.2% TTM, reflecting strong profitability in the telecommunications sector. Revenue growth has been consistent over the years, with a 4.4% increase from the previous year. The EBIT and EBITDA margins of 20.5% and 26.0% TTM respectively, indicate robust operational efficiency. Strengths include stable revenue growth and high profitability margins, while the slight decline in net income TTM compared to the previous year could be a potential area for improvement.
Balance Sheet
78
Positive
The balance sheet reveals a solid equity position with a debt-to-equity ratio of 1.2 TTM, which is reasonable for the industry, indicating moderate leverage. The return on equity (ROE) is 11.0% TTM, showcasing effective use of shareholders' funds. The equity ratio stands at 33.2% TTM, reflecting a stable capital structure. The company has effectively managed its assets and liabilities, though the increasing trend in total debt warrants monitoring.
Cash Flow
72
Positive
The cash flow statement shows a negative free cash flow growth, primarily due to increased capital expenditures. However, the operating cash flow to net income ratio of 1.8 TTM demonstrates strong cash generation relative to net income. The free cash flow to net income ratio is currently negative, indicating challenges in converting earnings to free cash flow. While operating cash flow remains strong, the decline in free cash flow growth suggests potential cash management issues.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
13.71T13.37T13.14T12.16T11.94T11.90T
Gross Profit
2.63T1.92T10.37T9.59T9.48T9.47T
EBIT
2.82T1.92T1.83T1.77T1.67T1.56T
EBITDA
3.56T3.70T3.41T3.33T3.20T3.07T
Net Income Common Stockholders
1.12T1.28T1.21T1.18T916.18B855.31B
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.20T982.87B892.57B923.00B977.46B1.07T
Total Assets
30.60T29.60T25.31T23.86T22.97T23.01T
Total Debt
12.09T10.71T9.15T8.21T8.37T4.75T
Net Debt
10.89T9.73T8.36T7.37T7.44T3.72T
Total Liabilities
19.32T18.71T15.96T14.84T14.76T11.55T
Stockholders Equity
10.16T9.84T8.56T8.28T7.56T9.06T
Cash FlowFree Cash Flow
-152.31B290.15B409.13B1.25T1.21T1.14T
Operating Cash Flow
2.02T2.37T2.26T3.01T3.01T3.00T
Investing Cash Flow
-1.83T-1.99T-1.74T-1.70T-1.42T-1.85T
Financing Cash Flow
23.41B-234.45B-590.20B-1.44T-1.69T-1.04T

Nippon Telegraph and Telephone Technical Analysis

Technical Analysis Sentiment
Positive
Last Price158.50
Price Trends
50DMA
150.17
Positive
100DMA
148.44
Positive
200DMA
148.48
Positive
Market Momentum
MACD
2.26
Negative
RSI
60.48
Neutral
STOCH
73.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9432, the sentiment is Positive. The current price of 158.5 is above the 20-day moving average (MA) of 154.80, above the 50-day MA of 150.17, and above the 200-day MA of 148.48, indicating a bullish trend. The MACD of 2.26 indicates Negative momentum. The RSI at 60.48 is Neutral, neither overbought nor oversold. The STOCH value of 73.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9432.

Nippon Telegraph and Telephone Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
¥10.44T20.02
3.91%7.57%6.30%
80
Outperform
$13.51T13.259.84%3.18%2.47%-20.86%
76
Outperform
€233.58B19.0612.86%2.58%8.11%6.48%
73
Outperform
$510.62B25.1814.78%1.18%14.76%0.69%
70
Outperform
¥9.12T14.2313.04%2.94%2.85%12.63%
65
Neutral
$10.77T9.4310.28%0.57%7.21%
61
Neutral
$14.60B5.95-4.32%3.69%2.76%-30.49%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:9432
Nippon Telegraph and Telephone
158.50
12.47
8.54%
JP:9434
SoftBank Corp.
220.00
32.11
17.09%
JP:9436
Okinawa Cellular Telephone Company
4,965.00
1,428.28
40.38%
JP:3774
Internet Initiative Japan
2,837.00
658.45
30.22%
JP:9984
SoftBank Group
7,363.00
-2,310.34
-23.88%
JP:9433
KDDI
2,410.00
324.26
15.55%

Nippon Telegraph and Telephone Corporate Events

NTT DOCOMO to Acquire SBI Sumishin Net Bank and Form Strategic Alliance
May 29, 2025

NTT announced that its subsidiary, NTT DOCOMO, will acquire SBI Sumishin Net Bank through a tender offer and establish a business alliance with SBI Holdings and Sumitomo Mitsui Trust Bank. This strategic move aims to take SBI Sumishin Net Bank private, ultimately making it a consolidated subsidiary of NTT DOCOMO, enhancing NTT’s market positioning and operational capabilities in the financial services sector.

The most recent analyst rating on (JP:9432) stock is a Hold with a Yen160.00 price target. To see the full list of analyst forecasts on Nippon Telegraph and Telephone stock, see the JP:9432 Stock Forecast page.

NTT Forms Strategic Alliance with SBI Holdings to Enhance Financial Services
May 29, 2025

NTT has entered into a capital and business alliance with SBI Holdings to create innovative financial services and enhance customer convenience in a rapidly evolving digital society. This alliance includes NTT DOCOMO’s acquisition of SBI Sumishin Net Bank’s stock and aims to strengthen collaborations in banking, asset management, and renewable energy sectors, contributing to sustainable growth and societal development.

The most recent analyst rating on (JP:9432) stock is a Hold with a Yen160.00 price target. To see the full list of analyst forecasts on Nippon Telegraph and Telephone stock, see the JP:9432 Stock Forecast page.

NTT Addresses Media Speculation on Banking Sector Entry
May 28, 2025

NTT has acknowledged media reports about its subsidiary, NTT DOCOMO, potentially entering the banking sector through acquiring SBI Sumishin Net Bank. However, NTT clarifies that these reports are not based on any official announcement from the company. The matter is set to be discussed in NTT DOCOMO’s Board of Directors meeting, and further announcements will be made if necessary.

The most recent analyst rating on (JP:9432) stock is a Hold with a Yen160.00 price target. To see the full list of analyst forecasts on Nippon Telegraph and Telephone stock, see the JP:9432 Stock Forecast page.

NTT Announces Changes in Board Leadership
May 9, 2025

Nippon Telegraph and Telephone Corporation announced changes in its board of directors, with the reappointment of Akira Shimada as President and Takashi Hiroi as Senior Executive Vice President, and the new appointment of Riaki Hoshino as Senior Executive Vice President. These changes, driven by a shift in management structure, will be finalized at the upcoming General Meeting of Shareholders, potentially impacting the company’s strategic direction and stakeholder interests.

NTT Announces Significant Stock Repurchase Plan
May 9, 2025

NTT announced a stock repurchase plan authorized by its Board of Directors to buy back up to 1.5 billion shares, representing 1.81% of outstanding shares, with a budget of up to 200 billion yen. This move aims to improve capital efficiency and enhance shareholder returns, potentially strengthening NTT’s market position and benefiting its stakeholders.

NTT Announces Corporate Name Change and Governance Restructuring
May 9, 2025

NTT has announced a series of significant changes, including adopting its widely recognized name ‘NTT, Inc.’ as its official corporate name and transitioning to a company with an Audit and Supervisory Committee. These changes aim to enhance global market operations, strengthen governance, and align with the company’s medium-term strategy focused on innovation and sustainability. The restructuring is expected to promote unity within the NTT Group and improve corporate value, reflecting the company’s commitment to adapting to evolving business environments and stakeholder expectations.

NTT Releases Financial Performance Data for FY2025
May 9, 2025

NTT has released its supplementary data for the fiscal year ended March 31, 2025, highlighting its financial performance and projections. The company reported consolidated operating revenues of 13,704.7 billion yen for FY2024, with a forecast of 14,190.0 billion yen for FY2025. Despite fluctuations in various segments, NTT continues to maintain a strong financial position with significant investments in capital and technology, which are expected to enhance its market competitiveness and operational efficiency.

NTT Reports Decline in Profits Despite Revenue Growth
May 9, 2025

NTT reported its financial results for the fiscal year ending March 31, 2025, showing a slight increase in operating revenues but a significant decline in profits compared to the previous year. The company’s operating profit and profit before taxes decreased by 14.2% and 21.0% respectively, highlighting challenges in maintaining profitability. Despite these declines, NTT’s total assets and equity showed growth, and the company announced an increase in annual dividends, indicating a commitment to returning value to shareholders. The financial outlook for the next fiscal year anticipates a recovery in profits, with projected increases in operating revenues and profit margins.

NTT Announces Tender Offer to Fully Acquire NTT DATA Group
May 8, 2025

Nippon Telegraph and Telephone Corporation has announced a tender offer to acquire the remaining shares of NTT DATA Group Corporation, aiming to make it a wholly-owned subsidiary. This strategic move is intended to strengthen NTT’s position in the market by consolidating its operations and enhancing its service capabilities, potentially impacting stakeholders by increasing operational efficiency and market competitiveness.

NTT Addresses Media Reports on Subsidiary Plans
May 7, 2025

NTT has acknowledged media reports about its potential plan to make NTT Data Group Corporation a wholly-owned subsidiary, though it clarifies that these reports are not based on an official announcement from the company. The decision is expected to be made by the Board of Directors, and NTT will issue an announcement if necessary. This move, if confirmed, could significantly impact NTT’s operational structure and market positioning, potentially affecting stakeholders and the broader industry.

NTT to Enhance Governance with New Committee Structure
Mar 25, 2025

NTT has announced its decision to transition from a company with an audit and supervisory board to one with an audit and supervisory committee. This change aims to strengthen corporate governance, enhance management discussions, and make the governance structure more comprehensible for global stakeholders. The transition is pending approval at the upcoming shareholders’ meeting and from the Minister of Internal Affairs and Communications.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.