Sk Telecom (SKM) AI Stock Analysis

• Market Cap: $8.99B
• Dividend Yield: 4.37%
• Average Volume (3M): 497.54K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.23
• Revenue Growth: -4.13%
• EPS Growth: 4.96%
• Country: US
• Employees: 5,054
• Sector: Communication Services
• Sector Strength: 87
• Industry: Telecommunications Services
• EPS (TTM): 0.60
• Shares Outstanding: 386,619,020
• 10 Day Avg. Volume: 655,557
• 30 Day Avg. Volume: 497,544
• PEG Ratio: -0.19
• Price to Book (P/B): 0.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.12
• 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: $25.08
• Price Target Upside: 5.42% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: $24.50 ▲(2.98%Upside)

SK Telecom's strong valuation and bullish technical indicators drive its overall score, supported by solid financial performance. However, the cybersecurity incident's impact on earnings tempers the score.

Positive Factors

Analyst Confidence

Analyst reiterates a Buy rating with an unchanged price objective of 71,000 KRW, indicating confidence in the stock's potential.

Bundled Plans

Despite the data breach, the risk of large-sized subscriber churn is low due to bundled plan subscriptions, which encourages customers to stay with the carrier.

Valuation

SK Telecom offers an undemanding valuation with a dividend yield of 6.8%, which is competitive compared to historical and peer averages.

Negative Factors

Data Breach Impact

The data breach has led to an increase in mobile number portability, requiring customer-retention costs and potentially impacting finances.

Financial Costs

Costs related to the recent data breach are likely to remain elevated, impacting future earnings.

Subscriber Losses

The company recorded net subscriber losses of 275k as a result of the data breach, with significant subscriber switches to competitors.

Sk Telecom Business Overview & Revenue Model

Company Description

SK Telecom Co., Ltd. provides wireless telecommunication services in South Korea. The company operates through three segments: Cellular Services, Fixed-Line Telecommunications Services, and Other Businesses. The Cellular Services segment offers wireless voice and data transmission, Internet of Things solutions, platform, cloud, smart factory solutions, subscription, and metaverse platform-based services, as well as sells wireless devices. The Fixed-Line Telecommunications Services segment provides fixed-line telephone services; broadband Internet services; media platform services, such as Internet protocol TV and cable TV; and business communications services. The Other Businesses segment offers television shopping services under the T-commerce brand, as well as portal services. In addition, it provides call center management, base station maintenance, information gathering and consulting, system software development and supply, quantum information and communications, data base and internet website, and digital contents sourcing services; manufactures and sells e-book; sells contents and mastering quality sound album; sells and trades in anti-theft and surveillance devices; and operates information and communications facilities. As of December 31, 2021, the company had 3.6 million fixed-line telephone and 31.9 million wireless subscribers. SK Telecom Company Limited was incorporated in 1984 and is headquartered in Seoul, South Korea.

How the Company Makes Money

SK Telecom generates revenue through multiple streams. The primary sources of income include mobile communication services, which encompass voice calls, messaging, and data plans offered to individual and corporate customers. The company also earns from broadband Internet and IPTV subscriptions, providing entertainment and internet access to households. Additional revenue is derived from digital service offerings, such as AI and big data solutions, cloud computing, and IoT services. SK Telecom partners with various technology firms to enhance its service offerings and expand its market reach, contributing to its revenue. Furthermore, the deployment and commercialization of 5G technology play a significant role in driving future growth and revenue for the company.

Sk Telecom Financial Statement Overview

Summary

Sk Telecom demonstrates financial stability with solid revenue growth and strong operational margins. Though profitability has room for enhancement, the balance sheet remains robust with a healthy equity buffer and manageable debt levels. Cash flow generation is strong, albeit with limited free cash flow growth potential.

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.

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.

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.94T	17.61T	17.30T	16.75T	16.09T
Gross Profit	12.93T	12.74T	12.44T	12.11T	11.70T
EBITDA	5.16T	5.09T	4.96T	5.06T	4.98T
Net Income	1.30T	1.09T	912.40B	2.41T	1.50T
Balance Sheet
Total Assets	30.52T	30.12T	31.31T	30.91T	47.91T
Cash, Cash Equivalents and Short-Term Investments	2.35T	1.75T	2.12T	1.39T	2.95T
Total Debt	10.76T	10.66T	11.08T	10.37T	12.16T
Total Liabilities	18.69T	17.89T	19.15T	18.58T	23.51T
Stockholders Equity	11.70T	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

• Technical Analysis Sentiment: Positive
• Last Price: 23.79
• 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 SKM, the sentiment is Positive. The current price of 23.79 is above the 20-day moving average (MA) of 22.34, above the 50-day MA of 21.57, and above the 200-day MA of 22.07, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 74.78 is Negative, neither overbought nor oversold. The STOCH value of 97.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKM.

Sk Telecom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TLK	79 Outperform	$16.98B	11.52	16.28%	5.89%	-5.14%	-7.47%
VIV	78 Outperform	$18.92B	18.65	7.95%	1.95%	-5.69%	-0.05%
SKM	74 Outperform	$8.99B	10.21	11.08%	4.37%	-4.13%	4.96%
KT	71 Outperform	$10.38B	23.19	3.81%	2.88%	-4.85%	-43.88%
Sector *	61 Neutral	$41.01B	-0.64	-14.21%	3.80%	2.39%	-73.52%
TEF	59 Neutral	$30.24B	―	-0.55%	4.50%	-2.29%	-182.68%
VOD	57 Neutral	$26.30B	9.21	-7.17%	4.74%	0.89%	-494.16%