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Sk Telecom Corporation (SKM)
NYSE:SKM
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Sk Telecom
(NYSE:SKM)
Rating:67Neutral
Price Target:
$24.00
▲(10.75% Upside)
Positive Factors
Business Expansion
The company is expected to continue delivering stable earnings with effective cost control and expanding non-telco businesses, mainly in DC/AI.
Dividend Yield
SK Telecom offers an attractive dividend yield of 6.6%, which is higher than the average over the past year.
Valuation
Despite current challenges, 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
A fine of W134.8bn was imposed on SKT for failing to protect 23 million subscribers’ data and not reporting breaches in a timely manner.
Earnings Decline
SKT's net profit is expected to decline by 60%, resulting in limited upside in free cash flow.
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
$8.37B
Dividend Yield4.58%
Average Volume (3M)341.69K
Price to Earnings (P/E)11.6
Beta (1Y)0.20
Revenue Growth-4.74%
EPS Growth-16.57%
CountryUS
Employees5,054
SectorCommunication Services
Sector Strength96
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.14
Shares Outstanding386,619,020
10 Day Avg. Volume324,151
30 Day Avg. Volume341,691
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 Cap1.84
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$23.72Price Target Upside9.46% Upside
Rating ConsensusHold
Number of Analyst Covering2
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: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Negative
The earnings call highlighted significant growth in SK Telecom's AI business and strategic initiatives in AI infrastructure, which are positive indicators for future revenue streams. However, the session was overshadowed by the adverse financial impact of a major cybersecurity incident, resulting in subscriber losses and substantial one-off expenses. The revision of the annual revenue guidance to a lower figure further emphasizes the challenges faced in the telecom segment.Q2-2025 Updates
Positive Updates
AI Business Growth
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 Initiative
SK Telecom announced a plan to establish a hyperscale AI data center with AWS and SK Group affiliates, aiming to secure a hub for AI Infrastructure Superhighway. The Ulsan AIDC is expected to start operations in 2027.
Dividend Policy
The Board of Directors resolved to set the second quarter DPS at KRW 831 with the record date of August 31, maintaining the payout level from the prior quarter.
Government AI Projects
SK Telecom was selected as a key player in the national AI model development by the government, participating in projects to develop sovereign AI foundation models.
Negative Updates
Cybersecurity Incident Impact
MNO revenue fell due to net subscriber losses following a cybersecurity incident, with consolidated revenue declining by 1.9% year-on-year. Operating income dropped 37.1% year-on-year, and net income fell 76.2% year-on-year.
Subscriber Base Decline
The number of 5G subscribers declined by approximately 220,000 quarter-on-quarter to 17.02 million, along with a loss in broadband and IPTV subscribers.
Increase in One-Off Costs
One-off costs totaling approximately KRW 250 billion were incurred in the second quarter, including loss compensation for authorized dealers and USIM replacement costs.
Downward Revision of Annual Revenue Guidance
Annual revenue guidance was reduced from KRW 17.8 trillion to KRW 17 trillion, with operating profit expected to underperform compared to the prior year.
Company Guidance
During the earnings call for SK Telecom's second quarter of fiscal year 2025, key financial metrics highlighted included a consolidated revenue of KRW 4,338.8 billion, representing a 1.9% year-on-year decline. Operating income was reported at KRW 338.3 billion, down 37.1% year-on-year, while net income fell significantly by 76.2% to KRW 83.2 billion. The company outlined its strategic response to a recent cybersecurity incident, which included a KRW 700 billion investment over five years to enhance information protection. The incident also affected SK Telecom's subscriber base, with a decline of 750,000 MNO handset subscribers by the end of June and a 220,000 quarter-on-quarter drop in 5G subscribers. Despite these challenges, the AI business showed promise with a 13.9% year-on-year revenue increase, and plans for a new AI data center in Ulsan were announced. The board resolved a second quarter dividend per share of KRW 831, maintaining the previous quarter's payout.Sk Telecom Financial Statement Overview
Summary
Sk Telecom demonstrates strong profitability with a robust gross profit margin and steady revenue growth. However, the modest net profit margin and moderate leverage pose some risks. Overall, the company maintains solid financial health with efficient cash flow management.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
Negative
21.67
Price Trends
22.38
Negative
21.93
Negative
21.86
Negative
Market Momentum
-0.19
Positive
41.33
Neutral
16.64
Positive
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 21.67 is below the 20-day moving average (MA) of 22.17, below the 50-day MA of 22.38, and below the 200-day MA of 21.86, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 41.33 is Neutral, neither overbought nor oversold. The STOCH value of 16.64 is Positive, 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $18.48B | 13.19 | 17.71% | 6.69% | -5.13% | -5.90% | |
72 Outperform | $9.03B | 14.73 | 5.22% | 2.98% | -1.22% | -17.07% | |
72 Outperform | $19.74B | 19.41 | 8.20% | 4.32% | -6.51% | -0.21% | |
67 Neutral | $8.37B | 11.63 | 8.49% | 4.58% | -4.74% | -16.57% | |
60 Neutral | $46.28B | 4.13 | -13.12% | 4.13% | 1.85% | -42.71% | |
60 Neutral | $28.34B | 9.21 | -7.17% | 4.21% | 0.89% | -494.16% | |
60 Neutral | $30.16B | ― | -3.55% | 6.74% | -4.73% | -251.31% |
* Communication Services Sector Average
Performance Comparison
SKM
Sk Telecom
21.67
-2.11
-8.87%
KT
KT
20.14
4.79
31.21%
TLK
PT Telekomunikasi Indonesia Tbk
19.24
0.72
3.89%
VIV
Telefonica Brasil
12.33
3.01
32.30%
TEF
Telefonica
5.29
0.85
19.14%
VOD
Vodafone
11.75
2.25
23.68%
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.