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Sk Telecom Corporation (SKM)
NYSE:SKM
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Sk Telecom
(NYSE:SKM)
Rating:68Neutral
Price Target:
$24.50
▲(8.70% Upside)
Positive Factors
Dividend Yield
Despite challenges, the company offers a dividend yield of 6.6%, which supports downside protection.
Earnings Stability
The company is expected to continue delivering stable earnings with effective cost control and expanding non-telco businesses, mainly in DC/AI.
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.
Earnings Outlook
Expected lower earnings improvement and capped shareholder returns limit the upside potential for SK Telecom.
Subscriber Loss
The company recorded net subscriber losses of 275k as a result of the data breach, with significant subscriber switches to competitors.
Sk Telecom (SKM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.62B
Dividend Yield4.4%
Average Volume (3M)355.64K
Price to Earnings (P/E)12.1
Beta (1Y)0.21
Revenue Growth-4.74%
EPS Growth-16.23%
CountryUS
Employees5,054
SectorCommunication Services
Sector Strength90
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.14
Shares Outstanding386,619,020
10 Day Avg. Volume322,391
30 Day Avg. Volume355,639
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.63
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$24.50Price Target Upside8.70% Upside
Rating ConsensusHold
Number of Analyst Covering1
Sk Telecom Business Overview & Revenue Model
Company DescriptionSK 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 MoneySK Telecom generates revenue primarily through its mobile telecommunications services, which include voice and data plans for individual consumers and businesses. The company also earns significant income from broadband internet services and fixed-line telephony. Another key revenue stream is the sale of value-added services, such as content delivery, cloud services, and IoT solutions. SK Telecom has established partnerships with various technology companies and content providers, which enhance its service offerings and contribute to revenue growth. Additionally, the company monetizes its investments in new technologies, such as 5G and AI, through both direct service offerings and collaborative ventures with other firms in the tech ecosystem.
Sk Telecom Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: -0.27%|
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Negative
The earnings call highlighted significant growth in the AI business and strategic plans for a new AI data center, showing SK Telecom's focus on innovation and future growth. However, the call was dominated by the negative impacts of a cybersecurity incident, which led to substantial financial losses, a decline in subscriber numbers, and lowered revenue guidance, overshadowing the positive aspects.Q2-2025 Updates
Positive Updates
AI Business Growth
The AI business revenue grew 13.9% year-on-year, partially offsetting the drop in telecom revenue. AIDC revenue posted KRW 108.7 billion, up 13.3% year-on-year, and AIX revenue grew 15.3% year-over-year to KRW 46.8 billion.
Hyperscale AI Data Center Plans
SK Telecom announced a plan to establish a hyperscale AI data center with AWS and SK Group affiliates in Ulsan, aiming to start operations in 2027 and secure a combined capacity of over 300 megawatts by 2030.
Commitment to Customer Assurance and Security
SK Telecom has developed an Information Protection Innovation Plan, where KRW 700 billion will be invested over the next 5 years to build a world-class information protection system, including free mobile device security solutions for all subscribers.
Negative Updates
Cybersecurity Incident Impact
The cybersecurity incident led to a net subscriber loss and suspension of new subscriber sign-ups, resulting in a decline in MNO revenue and operating income.
Significant Financial Impact
Consolidated revenue saw a decline of 1.9% year-on-year, with operating income down 37.1% and net income down 76.2% year-on-year due to the incident and related costs.
Reduction in Subscriber Base
The number of 5G subscribers declined by approximately 220,000 quarter-on-quarter to 17.02 million, accompanied by losses in broadband and IPTV subscribers.
Lowered Annual Revenue Guidance
Annual revenue guidance was lowered from KRW 17.8 trillion to KRW 17 trillion, with operating profit expected to underperform compared to the prior year.
Company Guidance
In the second quarter of fiscal year 2025, SK Telecom reported consolidated revenue of KRW 4,338.8 billion, a 1.9% year-on-year decline due to a cybersecurity incident and the sale of certain subsidiaries. Operating income dropped by 37.1% year-on-year to KRW 338.3 billion, affected by USIM replacement costs and approximately KRW 250 billion in one-off expenses, including loss compensation for authorized dealers. The net income was KRW 83.2 billion, a 76.2% year-on-year decrease. The number of 5G subscribers fell by 220,000 to 17.02 million, while AI business revenue grew 13.9% year-on-year, partly offsetting the telecom revenue decline. SK Telecom also announced a KRW 700 billion Information Protection Innovation Plan over the next five years and a Customer Appreciation Package, including 50% tariff discounts and additional data. The Board set the second quarter DPS at KRW 831. The company aims to enhance corporate value through robust cybersecurity measures and AI business expansion, despite the anticipated financial impact of the incident on 2025 earnings, with revised annual revenue guidance of KRW 17 trillion.Sk Telecom Financial Statement Overview
Summary
Sk Telecom exhibits solid financial health with strong profitability and efficient cash flow management. The company shows steady revenue growth and effective cost control, though leverage poses a moderate risk. Opportunities exist to enhance net profitability and reduce leverage for increased financial flexibility.Income Statement
Sk Telecom shows a strong gross profit margin at 84.3% TTM, indicating efficient cost management. The net profit margin is modest at 7.3% TTM, reflecting stable profitability. Revenue growth is steady with a 3.54% increase from 2023 to 2024, and EBIT margin improved to 22.5% TTM, showcasing operational efficiency improvements. EBITDA margin remains robust at 30.7% TTM, underlining strong cash generation capabilities. Overall, Sk Telecom's income statement reveals solid profitability and growth, although net margins could be improved.75
Positive
Balance Sheet
The debt-to-equity ratio stands at 0.9, indicating a moderate level of leverage. Return on equity is healthy at 11.1% TTM, suggesting effective use of equity to generate profits. The equity ratio is 39.5% TTM, highlighting a balanced capital structure. While the company maintains a stable financial position, a slightly high debt level presents a risk if market conditions deteriorate.68
Positive
Cash Flow
Operating cash flow to net income ratio is strong at 4.0 TTM, demonstrating robust cash flow generation relative to profits. Free cash flow growth rate is healthy at 6.73% from 2023 to TTM, indicating effective capital management. The free cash flow to net income ratio is 2.1 TTM, showing good conversion of earnings into free cash flow. Overall, Sk Telecom's cash flow statement reflects efficient cash management and sustainability in operations.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 17.92T | 17.94T | 17.61T | 17.30T | 16.75T | 16.09T |
| Gross Profit | 15.11T | 12.93T | 12.74T | 12.44T | 12.11T | 11.70T |
| EBITDA | 5.50T | 5.16T | 5.09T | 4.96T | 5.06T | 4.98T |
| Net Income | 1.31T | 1.30T | 1.09T | 912.40B | 2.41T | 1.50T |
Balance Sheet | ||||||
| Total Assets | 29.92T | 30.52T | 30.12T | 31.31T | 30.91T | 47.91T |
| Cash, Cash Equivalents and Short-Term Investments | 2.55T | 2.35T | 1.75T | 2.12T | 1.39T | 2.95T |
| Total Debt | 10.67T | 10.76T | 10.66T | 11.08T | 10.37T | 12.16T |
| Total Liabilities | 17.98T | 18.69T | 17.89T | 19.15T | 18.58T | 23.51T |
| Stockholders Equity | 11.82T | 11.70T | 10.99T | 11.32T | 11.58T | 23.74T |
Cash Flow | ||||||
| Free Cash Flow | 2.70T | 2.53T | 1.87T | 2.11T | 1.72T | 2.13T |
| Operating Cash Flow | 5.22T | 5.09T | 4.95T | 5.16T | 5.03T | 5.82T |
| Investing Cash Flow | -2.53T | -2.71T | -3.35T | -2.81T | -3.49T | -4.25T |
| Financing Cash Flow | -2.11T | -1.81T | -2.02T | -1.35T | -2.05T | -1.46T |
Sk Telecom Technical Analysis
Positive
22.54
Price Trends
22.32
Positive
21.80
Positive
21.90
Positive
Market Momentum
0.07
Negative
53.27
Neutral
78.86
Neutral
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 22.54 is above the 20-day moving average (MA) of 22.35, above the 50-day MA of 22.32, and above the 200-day MA of 21.90, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 53.27 is Neutral, neither overbought nor oversold. The STOCH value of 78.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $19.61B | 19.52 | 8.20% | 3.63% | -6.51% | -0.21% | |
74 Outperform | $18.18B | 12.76 | 17.71% | 6.31% | -5.13% | -5.90% | |
70 Outperform | $9.76B | 15.34 | 3.81% | 3.68% | -1.22% | -19.08% | |
68 Neutral | $8.62B | 12.14 | 11.08% | 4.40% | -4.74% | -16.23% | |
62 Neutral | $28.05B | 9.21 | -7.17% | 4.29% | 0.89% | -494.16% | |
60 Neutral | $31.02B | ― | -3.55% | 6.54% | -4.73% | -251.31% | |
60 Neutral | $43.99B | 4.24 | -10.43% | 4.00% | 2.31% | -34.39% |
* Communication Services Sector Average
Performance Comparison
SKM
Sk Telecom
22.54
-0.02
-0.09%
KT
KT
20.27
6.12
43.25%
TLK
PT Telekomunikasi Indonesia Tbk
20.39
3.02
17.39%
VIV
Telefonica Brasil
12.17
3.36
38.14%
TEF
Telefonica
5.55
1.32
31.21%
VOD
Vodafone
11.65
2.54
27.88%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.