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Sk Telecom Corporation (SKM)
NYSE:SKM
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Sk Telecom
(NYSE:SKM)
69Neutral
Positive Factors
AI Business
The AI business is seen as a long-term growth catalyst, with potential earnings upsides from AI data center services and AI B2B developments.
B2B Growth
Higher-than-expected growth in B2B businesses, including cloud services, contributed to the company's stable earnings performance.
Shareholder Returns
The company reaffirmed its commitment to improving capital efficiency and shareholder returns, targeting a return on equity of over 10% by 2026.
Negative Factors
Net Profit Decline
Net profit was down 9% year-over-year due to valuation losses in equity investments, impacting the dividend payout calculations.
Sk Telecom (SKM) vs. S&P 500 (SPY)
Market Cap
$8.13B
Dividend Yield5.35%
Average Volume (3M)305.48K
Price to Earnings (P/E)9.0
Beta (1Y)0.29
Revenue Growth-2.34%
EPS Growth12.31%
CountryUS
Employees34,847
SectorCommunication Services
Sector Strength79
IndustryTelecommunications
Share Statistics
EPS (TTM)2.37
Shares Outstanding386,619,020
10 Day Avg. Volume291,886
30 Day Avg. Volume305,475
Financial Highlights & Ratios
PEG Ratio0.73
Price to Book (P/B)N/A
Price to Sales (P/S)0.67
Price to Cash Flow (P/CF)2.50
P/FCF Ratio4.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$48.94Price Target Upside129.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Sk Telecom Business Overview & Revenue Model
Company DescriptionSK Telecom Co., Ltd. engages in the provision of wireless telecommunication and internet services. Its products include mobile phones, wireless data, information communication, and others. The company was founded on March 29, 1984 and is headquartered in Seoul, South Korea.
How the Company Makes MoneySK Telecom generates revenue through multiple streams, primarily from its mobile telecommunications services, which include voice, data, and value-added services such as messaging and content delivery. The company also earns from its fixed-line services, providing broadband internet and IPTV services to residential and business customers. Additionally, SK Telecom has diversified its revenue by investing in media, security, and commerce sectors through subsidiaries and partnerships. Its media division generates income from content distribution and advertising, while its security services offer surveillance and cyber security solutions. SK Telecom's strategic partnerships with global tech firms and its leadership in 5G technology contribute significantly to its revenue growth, as it continues to expand its services and customer base.
Sk Telecom Financial Statement Overview
Summary
Sk Telecom presents a solid financial position with stable revenue growth and strong operational margins. The balance sheet is robust, with a healthy equity buffer and manageable debt levels. Cash flow generation is strong, though there is room for improvement in free cash flow growth. Overall, the company demonstrates financial stability with some areas for profitability enhancement.Income Statement
Sk Telecom has shown a stable revenue growth with a 1.89% increase year-over-year and a healthy gross profit margin of 85.01% for TTM (Trailing-Twelve-Months). However, the net profit margin is relatively low at 7.26%, indicating room for improvement in profitability. EBIT and EBITDA margins are robust at 28.13% and 30.25%, respectively, reflecting strong operational performance.75
Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 38.51% and a manageable debt-to-equity ratio of 0.57. Return on equity is moderate at 11.08%, suggesting efficient use of equity capital. Overall, the balance sheet is stable, but there is a need to monitor liabilities closely.70
Positive
Cash Flow
Operating cash flow remains strong with a high operating cash flow to net income ratio of 2.93, indicating good cash generation relative to profit. However, free cash flow growth is modest at 17.92% year-over-year, and the free cash flow to net income ratio stands at 1.69, suggesting limited free cash flow growth potential.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 17.94T | 17.61T | 17.30T | 16.75T | 18.62T |
| Gross Profit | ||||
| 12.93T | 12.74T | 15.05T | 14.52T | 15.95T |
| EBIT | ||||
| 1.82T | 1.75T | 1.61T | 1.95T | 2.42T |
| EBITDA | ||||
| 5.16T | 5.09T | 5.27T | 5.22T | 4.81T |
| Net Income Common Stockholders | ||||
| 1.30T | 1.09T | 912.40B | 1.27T | 1.50T |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.35T | 1.75T | 2.12T | 1.39T | 2.95T |
| Total Assets | ||||
| 30.52T | 30.12T | 31.31T | 30.91T | 47.91T |
| Total Debt | ||||
| 6.67T | 10.66T | 11.08T | 10.37T | 12.16T |
| Net Debt | ||||
| 4.32T | 9.20T | 9.20T | 9.50T | 10.79T |
| Total Liabilities | ||||
| 18.64T | 17.89T | 19.15T | 18.58T | 23.51T |
| Stockholders Equity | ||||
| 11.75T | 10.99T | 11.32T | 11.58T | 23.74T |
| Cash Flow | Free Cash Flow | |||
| 0.00 | 1.87T | 2.11T | 1.72T | 2.13T |
| Operating Cash Flow | ||||
| 0.00 | 4.95T | 5.16T | 5.03T | 5.82T |
| Investing Cash Flow | ||||
| 0.00 | -3.35T | -2.81T | -3.49T | -4.25T |
| Financing Cash Flow | ||||
| 0.00 | -2.02T | -1.35T | -2.05T | -1.46T |
Sk Telecom Technical Analysis
Negative
21.37
Price Trends
21.63
Negative
21.99
Negative
22.19
Negative
Market Momentum
-0.12
Positive
45.11
Neutral
51.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKM, the sentiment is Negative. The current price of 21.37 is below the 20-day moving average (MA) of 21.75, below the 50-day MA of 21.63, and below the 200-day MA of 22.19, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 45.11 is Neutral, neither overbought nor oversold. The STOCH value of 51.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SKM.
Sk Telecom Risk Analysis
Sk Telecom disclosed 32 risk factors in its most recent earnings report. Sk Telecom reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sk Telecom Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $192.30B | 17.96 | 10.54% | 4.14% | -0.08% | -24.48% | |
76 Outperform | $293.46B | 26.59 | 17.93% | 1.19% | 3.62% | 38.24% | |
74 Outperform | $57.45B | 10.34 | 38.11% | ― | 0.88% | 16.44% | |
73 Outperform | $184.17B | 10.55 | 18.27% | 6.14% | 0.61% | 50.39% | |
69 Neutral | $8.13B | 9.04 | 11.19% | 5.35% | -2.34% | 12.31% | |
64 Neutral | $6.22B | ― | -17.68% | ― | 32.25% | 20.56% | |
59 Neutral | $28.84B | 0.84 | -18.78% | 3.98% | 2.13% | -47.15% |
* Communication Services Sector Average
Performance Comparison
SKM
Sk Telecom
21.37
-0.64
-2.91%
T
AT&T
27.02
10.84
67.00%
CHTR
Charter Communications
363.81
73.21
25.19%
VZ
Verizon
43.99
5.71
14.92%
TMUS
T Mobile US
255.84
96.97
61.04%
S
SentinelOne
19.27
-3.21
-14.28%
Sk Telecom Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -1.02% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook for SK Telecom, with growth in AI-related revenues and operational improvements offsetting concerns about MNO business slowdown and cautious dividend strategies.Highlights
Consolidated Revenue Growth
Consolidated revenue reported KRW 17,940.6 billion, up 1.9% year-over-year, with sustained growth in fixed and mobile, enterprise, and AI business areas.
AI-Related Revenue Increase
AI-related revenue grew 19% year-over-year in 2024, with significant investments in AI partnerships and new service launches like SKT GPU-as-a-Service.
Net Income Increase
Net income posted KRW 1,438.8 billion, up 25.6% year-over-year, aided by business portfolio restructuring and asset efficiency enhancement.
Operational Improvements
Operational improvements led to a 4% year-over-year increase in operating profit, with major expense reductions and AI-driven cost efficiency measures.
AI Infrastructure Development
Plans to build a hyperscale AI data center leveraging SK Group's capabilities, with a long-term goal to become an AI data center hub in the Asia Pacific region.
Lowlights
MNO Business Slowdown
The MNO business experienced a slight slowdown in top-line growth, although customer-friendly roaming services contributed to some revenue growth.
Marketing Cost Reduction
Marketing costs were reduced in Q4, reflecting a stable but competitive market environment after the handset subsidy ban was lifted.
Dividend Concerns
Despite improved earnings, the dividend per share was maintained at the same level as the previous year, reflecting a cautious approach due to uncertain business environments.
Company Guidance
In the earnings conference call for the fourth quarter and fiscal year 2024, SK Telecom provided substantial guidance on their financial performance and future outlook. Consolidated revenue for 2024 reached KRW 17,940.6 billion, marking a 1.9% increase year-over-year, with a consolidated operating profit growth of 4% and an operating profit margin exceeding 10%. The net income rose significantly by 25.6% year-over-year to KRW 1,438.8 billion, driven by business portfolio restructuring and asset efficiency enhancements. AI-related revenue saw substantial growth, increasing by 19% year-over-year, with significant contributions from AI B2B segments like AIX and AIDC. For 2025, SK Telecom has set an annual consolidated revenue target of KRW 17.8 trillion, representing approximately 1% growth year-over-year. The company remains focused on continuous operational improvements and strategic investments in AI, aiming for further growth in both AI-related revenue and operating income. Additionally, the company declared a dividend per share (DPS) of KRW 3,540 for 2024, maintaining stability in shareholder returns amidst economic uncertainties.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.