PCCW (PCCWY) AI Stock Analysis

• Market Cap: $5.96B
• Dividend Yield: 6.46%
• Average Volume (3M): 748.00
• Price to Earnings (P/E): ―
• Beta (1Y): 0.07
• Revenue Growth: 4.66%
• EPS Growth: 36.62%
• Country: US
• Employees: 14,600
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): -0.07
• Shares Outstanding: 774,106,300
• 10 Day Avg. Volume: 769
• 30 Day Avg. Volume: 748
• PEG Ratio: 15.00
• Price to Book (P/B): 4.81
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 4.26
• Enterprise Value/Market Cap: 2.32
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 0.74
• Enterprise Value/Ebitda: 1.78
• 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: 60 Neutral
• Price Target: $8.50 ▲(11.99% Upside)

PCCW's overall stock score is driven by strong technical momentum and operational efficiency, but is significantly hampered by profitability challenges and high leverage. The attractive dividend yield provides some offset to valuation concerns, but the negative P/E ratio remains a major risk factor.

Positive Factors

Cash Flow Management

Strong cash flow management indicates PCCW's ability to generate cash efficiently, providing financial flexibility and supporting long-term investments.

Operational Efficiency

High gross and EBITDA margins suggest effective cost management and operational efficiency, which can sustain profitability over time despite current net losses.

Revenue Diversification

Diverse revenue streams reduce dependency on a single segment, enhancing resilience against market fluctuations and supporting steady growth.

Negative Factors

High Leverage

Significant leverage increases financial risk, potentially limiting the company's ability to invest in growth opportunities and affecting long-term stability.

Profitability Challenges

Negative profitability indicates challenges in covering costs and generating sufficient returns, which could impact future financial health and investor confidence.

Limited Equity

A low equity ratio suggests limited financial buffer against liabilities, increasing vulnerability to economic downturns and financial stress.

PCCW Business Overview & Revenue Model

Company Description

PCCW Limited provides telecommunications and related services in Hong Kong, Mainland and other parts of China, Singapore, and internationally. The company's services include local telephony, local data and broadband, mobile, international telecommunications, and satellite-based and network-based telecommunications services; and outsourcing, consulting, and contact center services. It also provides technical support, electronics and communications engineering, and products and solutions, as well as free television, pay television program, and interactive multimedia services; sells advertising in various telephone directories and on the Internet; publishes directories; and sells mobile handsets and accessories. In addition, the company offers broadcasting and related services, management and engineering support services, customer relationship management and customer contact management solutions, and media content services; and over-the-top video services under the Viu brand, as well as sells customer premises equipment and related solutions. Further, it engages in the sale, distribution, and marketing of telecommunication products and services; supply of broadband internet access solutions and web services; provision of data services; software development, systems integration, consulting, and informatization activities; computer facilities management; the provision of computer and IP/IT related value-added services to business customers; and operates customer loyalty program and online merchandise sales. Additionally, the company offers IT and business process outsourcing, fintech, e-Commerce, big data analytics, managed, digital, cloud, and IoT solutions. PCCW Limited was founded in 1925 and is headquartered in Quarry Bay, Hong Kong.

How the Company Makes Money

PCCW generates revenue through several key streams, primarily by providing telecommunications services, including mobile and fixed-line services to consumers and businesses. The company earns income from subscriptions, usage fees, and interconnection charges. Additionally, PCCW has a significant presence in the IT and cloud solutions market, where it offers data center services, managed IT services, and cloud computing solutions, contributing to its revenue through service contracts and partnerships with enterprises. Media and content delivery also serve as a revenue source, with PCCW monetizing subscriptions and advertising revenues from its television and streaming platforms. Strategic partnerships, such as collaborations with global technology firms and content providers, further enhance its offerings and revenue potential.

PCCW Financial Statement Overview

Summary

PCCW shows operational efficiency and strong cash flow management, with a revenue growth of 3.33%. However, the company faces challenges with profitability due to a net loss and high leverage, as indicated by a high debt-to-equity ratio of 7.20.

Income Statement

PCCW's income statement shows a mixed performance. The company has experienced a modest revenue growth of 3.33% from 2023 to 2024, indicating a positive trend. However, the net profit margin is negative due to a net loss in 2024, which raises concerns about profitability. The gross profit margin remains strong at 49.06%, and the EBITDA margin is healthy at 29.88%, suggesting operational efficiency despite the net loss.

Balance Sheet

The balance sheet presents a challenging picture with a high debt-to-equity ratio of 7.20, indicating significant leverage. The equity ratio is low at 7.58%, reflecting limited equity compared to total assets. Return on equity is negative due to the net loss, which is a concern. The high leverage poses a risk, but the company's substantial asset base provides some stability.

Cash Flow

PCCW's cash flow statement is relatively strong, with a significant free cash flow growth of 58.95% from 2023 to 2024. The operating cash flow to net income ratio is not meaningful due to the net loss, but the company has a robust free cash flow to net income ratio, indicating good cash generation capabilities. This suggests that despite profitability challenges, the company maintains solid cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.78B	37.56B	36.35B	36.06B	35.45B	35.98B
Gross Profit	18.61B	18.43B	18.23B	18.15B	17.73B	16.80B
EBITDA	7.76B	11.22B	11.28B	12.38B	11.86B	11.11B
Net Income	-51.00M	-66.00M	-236.00M	393.00M	1.26B	-1.02B
Balance Sheet
Total Assets	101.17B	98.76B	94.56B	95.06B	94.22B	97.84B
Cash, Cash Equivalents and Short-Term Investments	3.14B	3.02B	3.13B	3.13B	5.04B	5.20B
Total Debt	59.25B	53.94B	54.19B	51.65B	49.22B	60.56B
Total Liabilities	93.77B	87.24B	84.86B	82.30B	78.74B	84.28B
Stockholders Equity	4.23B	7.49B	2.48B	11.44B	14.36B	9.93B
Cash Flow
Free Cash Flow	9.12B	8.46B	5.32B	3.43B	1.78B	5.57B
Operating Cash Flow	11.29B	10.63B	13.35B	10.34B	9.70B	12.70B
Investing Cash Flow	-8.04B	-7.70B	-7.46B	-6.01B	-7.62B	-7.54B
Financing Cash Flow	-3.38B	-3.26B	-6.27B	-5.83B	-1.57B	-6.47B

PCCW Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCCWY, the sentiment is Positive. The current price of 7.59 is above the 20-day moving average (MA) of 7.44, above the 50-day MA of 7.07, and above the 200-day MA of 6.61, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 60.23 is Neutral, neither overbought nor oversold. The STOCH value of 82.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PCCWY.

PCCW Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHI	77 Outperform	$4.69B	9.23	25.22%	7.63%	0.59%	8.86%
VIV	77 Outperform	$19.73B	18.44	8.36%	4.88%	-3.16%	4.70%
TKC	74 Outperform	$5.00B	11.43	7.60%	5.46%	19.02%	9.26%
KT	68 Neutral	$8.72B	13.33	5.26%	4.14%	0.63%	-21.51%
TEO	61 Neutral	$5.75B	―	-2.95%	0.36%	15.38%	-292.52%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
PCCWY	60 Neutral	$5.96B	―	―	6.46%	4.66%	36.62%