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KT Corporation (KT)
NYSE:KT
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KT
(NYSE:KT)
70Outperform
Positive Factors
Earnings Growth
KT's dividend per share is estimated to rise by 33% in 2025, yielding 6%, driven by expected earnings growth and cost control.
Growth Strategy
KT is focusing on boosting revenue from artificial intelligence and communication technology, expecting a threefold increase by 2028.
Shareholder Returns
KT announced a share buyback/cancellation of W250bn as a part of the Value-Up program, which is expected to enhance shareholder value.
Negative Factors
Financial Performance
KT registered an operating loss of W655bn in 4Q, largely in line with estimates, recognizing one-off labor restructuring costs of c.W1tn.
Labor Costs
Labor restructuring involves significant costs, with an estimated one-off labor cost that will impact financials in the short term.
KT (KT) vs. S&P 500 (SPY)
Market Cap
$8.27B
Dividend Yield5.89%
Average Volume (3M)1.54M
Price to Earnings (P/E)25.3
Beta (1Y)0.34
Revenue Growth-3.60%
EPS Growth-51.54%
CountryUS
Employees18,617
SectorCommunication Services
Sector Strength74
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.74
Shares Outstanding504,043,370
10 Day Avg. Volume1,302,024
30 Day Avg. Volume1,543,386
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.48
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.54Price Target Upside21.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
KT Business Overview & Revenue Model
Company DescriptionKT Corporation, formerly Korea Telecom, is a leading South Korean telecommunications company. It operates in sectors including telecommunication services, broadband internet, media and content, and financial technology. KT offers a wide range of services, such as mobile and fixed-line telephony, high-speed internet, digital television, and enterprise IT solutions.
How the Company Makes MoneyKT Corporation generates revenue through multiple streams. The primary source is its telecommunication services, which include mobile and fixed-line subscriptions and services. Additionally, KT earns money from broadband internet services and digital media offerings, such as IPTV and OTT content. The company's enterprise IT solutions, which provide businesses with cloud services and cybersecurity, also contribute significantly to its earnings. Partnerships with content providers and technology companies, along with strategic investments in fintech, further enhance KT's revenue potential.
KT Financial Statement Overview
Summary
KT displays solid revenue growth and effective cost management, as evidenced by improving gross margins. However, declining net and operational margins highlight potential profitability challenges. The balance sheet reflects a stable leverage position, but reduced ROE suggests profitability issues. Cash flow is improving, but significant capital expenditures impact free cash flow. KT's financials suggest a cautious outlook with strengths in revenue and asset management but challenges in profitability.Income Statement
KT has shown a steady revenue growth trajectory with a 5.2% increase from 2022 to 2023. The gross profit margin improved from 32.5% in 2023 to 34.6% in 2024, indicating better cost management. However, the net profit margin has declined to 1.8% in 2024 from 3.8% in 2023, suggesting increased expenses or lower operational efficiency. EBIT and EBITDA margins also saw declines, highlighting potential challenges in operational profitability.70
Positive
Balance Sheet
KT maintains a stable financial position with a moderate debt-to-equity ratio of 0.71 in 2024, reflecting balanced leverage. Stockholders' equity remains robust, supporting an equity ratio of 38.7%, indicating strong asset backing. However, the overall asset base slightly decreased, and the return on equity dropped to 2.9%, suggesting reduced profitability from shareholder investments.75
Positive
Cash Flow
Free cash flow showed significant growth, rising by 62% from 2023 to 2024, indicating improved cash generation. However, the operating cash flow to net income ratio is high, at 10.8, pointing towards strong cash flow relative to earnings, which may indicate non-operational adjustments. Despite this, the free cash flow to net income ratio is lower, suggesting significant capital expenditures impacting cash flow.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 26.43T | 26.29T | 25.65T | 24.90T | 23.92T |
| Gross Profit | ||||
| 9.15T | 8.53T | 15.91T | 14.86T | 14.13T |
| EBIT | ||||
| 809.47B | 1.43T | 1.69T | 1.67T | 1.64T |
| EBITDA | ||||
| 4.24T | 5.54T | 5.86T | 5.73T | 4.87T |
| Net Income Common Stockholders | ||||
| 470.29B | 993.33B | 1.26T | 1.36T | 700.89B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.88T | 4.27T | 3.77T | 4.21T | 3.84T |
| Total Assets | ||||
| 41.88T | 42.79T | 40.98T | 37.16T | 33.66T |
| Total Debt | ||||
| 11.58T | 11.40T | 10.01T | 8.44T | 7.32T |
| Net Debt | ||||
| 7.86T | 8.52T | 7.56T | 5.42T | 4.68T |
| Total Liabilities | ||||
| 23.88T | 24.25T | 22.57T | 20.59T | 18.11T |
| Stockholders Equity | ||||
| 16.21T | 16.73T | 16.61T | 14.98T | 14.01T |
| Cash Flow | Free Cash Flow | |||
| 2.16T | 1.33T | -390.07B | 1.31T | 1.02T |
| Operating Cash Flow | ||||
| 5.07T | 5.50T | 3.60T | 5.56T | 4.74T |
| Investing Cash Flow | ||||
| -2.85T | -4.62T | -4.84T | -5.14T | -3.76T |
| Financing Cash Flow | ||||
| -1.39T | -452.79B | 669.33B | -41.28B | -647.59B |
KT Technical Analysis
Neutral
17.69
Price Trends
17.54
Positive
16.86
Positive
15.71
Positive
Market Momentum
0.06
Positive
49.34
Neutral
21.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KT, the sentiment is Neutral. The current price of 17.69 is below the 20-day moving average (MA) of 17.94, above the 50-day MA of 17.54, and above the 200-day MA of 15.71, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 49.34 is Neutral, neither overbought nor oversold. The STOCH value of 21.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KT.
KT Risk Analysis
KT disclosed 26 risk factors in its most recent earnings report. KT reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
KT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $304.51B | 27.60 | 17.93% | 1.15% | 3.62% | 38.24% | |
76 Outperform | $203.00B | 18.96 | 10.54% | 3.92% | -0.08% | -24.48% | |
73 Outperform | $190.95B | 10.94 | 18.27% | 5.92% | 0.61% | 50.39% | |
70 Outperform | $8.27B | 25.31 | 3.02% | 5.89% | -3.60% | -51.54% | |
65 Neutral | $5.88B | ― | -0.85% | ― | -3.48% | -169.60% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
47 Neutral | $4.02B | ― | -12.49% | ― | -9.95% | 99.47% |
* Communication Services Sector Average
Performance Comparison
KT
KT
17.69
4.26
31.72%
T
AT&T
28.48
11.84
71.15%
LUMN
Lumen Technologies
3.84
2.42
170.42%
USM
United States Cellular
69.71
32.86
89.17%
VZ
Verizon
45.38
5.25
13.08%
TMUS
T Mobile US
268.54
107.55
66.81%
KT Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 5.30% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The call presented a mixed outlook with record-breaking revenue and strategic partnerships highlighting future growth potential, but significant declines in operating profit and net profit due to workforce restructuring impacted overall performance negatively.Highlights
Record-Breaking Revenue
Consolidated revenue reported KRW 26,431.2 billion, a historical record since the company went public in 1998.
Strategic Partnership with Microsoft
Partnership with Microsoft to transform into an AICT company, focusing on structural profitability improvements.
Strong Performance in Cloud and Data Center
KT Cloud posted 15.5% year-over-year growth, supported by growing data center usage by global customers.
Increase in AI/IT Business Revenue
AI/IT business revenue increased 11.9% year-on-year, driven by AICC expansion and Thailand's LLM project.
Dividend Increase
Annual DPS increased from KRW 1,961 in 2023 to KRW 2,001 in FY '24.
Debt-to-Equity Ratio Improvement
Net debt-to-equity ratio dipped 1.9 percentage points year-over-year, reporting 37.7%.
Wireless Revenue Growth
Wireless revenue was up 1.3% year-on-year, with 5G subscriber count exceeding 10.4 million.
Lowlights
Significant Decline in Operating Profit
Operating profit fell 50.9% year-on-year to KRW 809.5 billion due to one-off labor costs.
Decrease in Net Profit
Net profit fell 54.5% year-on-year to KRW 450.1 billion.
Decline in EBITDA
EBITDA was down 14.2% year-on-year to KRW 4,687.2 billion.
Increase in Operating Expenses
Operating expense was up 3.6% year-on-year, reporting KRW 25,621.7 billion, due to workforce revamping.
BC Card Revenue Decline
BC Card revenue was down 5.4% year-on-year to KRW 3,805.8 billion.
KT Skylife Revenue Decline
KT Skylife revenue was down 1.5% year-on-year to KRW 1,022.9 billion.
Content Subsidiary Revenue Fall
Content subsidiary saw its revenue fall by 13.6% year-on-year.
Company Guidance
During the call, KT provided guidance on several key metrics for fiscal year 2024. Consolidated revenue reached KRW 26,431.2 billion, marking a historical record since the company went public in 1998. However, operating profit fell by 50.9% year-on-year to KRW 809.5 billion, primarily due to one-off labor costs associated with workforce restructuring. Excluding these one-offs, the operating profit would have been KRW 1,811.8 billion, indicating a 9.8% increase year-on-year. The company's net profit declined by 54.5% year-on-year to KRW 450.1 billion, and EBITDA was down 14.2% year-on-year at KRW 4,687.2 billion. KT announced a consolidated revenue target of above KRW 28 trillion for the coming year and plans to enhance shareholder value through quarterly dividends and a share buyback and cancellation plan amounting to KRW 1 trillion until 2028.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.