tiprankstipranks
Trending News
More News >
Sk Telecom (SKM)
:SKM
Advertisement

Sk Telecom (SKM) AI Stock Analysis

Compare
261 Followers

Top Page

SKM

Sk Telecom

(NYSE:SKM)

Rating:69Neutral
Price Target:
$24.00
▲(6.10%Upside)
Sk Telecom's overall score reflects strong financial performance and attractive valuation. However, the impact of the recent cybersecurity incident, coupled with mixed technical indicators, tempers the overall positive outlook.
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.
Dividend Yield
Despite challenges, the company offers a dividend yield of 6.6%, which supports downside protection.
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
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)

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 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 Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 8.80%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call showcased robust growth in AI and AIDC businesses, along with an increase in operating income. However, these positives were offset by the cybersecurity incident, which has raised concerns about customer retention and revenue impact, as well as a slight decline in net income.
Q1-2025 Updates
Positive Updates
Operating Income Increase
Operating income increased by 13.8% year-over-year, reaching KRW 567.4 billion, due to decreased marketing and depreciation costs as the 5G market matures.
AI Business Growth
AI business revenue grew by 15.6% year-over-year, maintaining a strong growth momentum, and AI B2B business contributed to earnings through virtual consultation services and AI marketing services.
AIDC Business Performance
AIDC business achieved KRW 102 billion in revenue for the first quarter, up 11.1% year-over-year, indicating strong performance and potential for future growth.
AIX Revenue Surge
AIX revenue was KRW 45.2 billion, experiencing a significant year-over-year increase of 27.2%.
Cumulative Subscribers Growth
Adot has strengthened its profit base with cumulative subscribers surpassing 9 million in the first quarter.
Negative Updates
Cybersecurity Incident Impact
A recent cybersecurity incident has caused increased customer churn to other mobile network operators and led to the suspension of new subscriber sign-ups, potentially affecting revenue.
Net Income Slight Decline
Net income posted a slight decline of 0.1% year-over-year, totaling KRW 361.6 billion.
Revenue Decrease
Consolidated revenue decreased by 0.5% year-over-year, amounting to KRW 4,453.7 billion, primarily due to the sale of certain subsidiaries.
Uncertain Financial Impact of Cybersecurity Incident
The financial impact of the cybersecurity incident is uncertain, with potential costs related to USIM replacements, administrative penalties, and revenue losses from subscriber churn.
Company Guidance
During the first quarter of 2025 earnings call, SK Telecom provided guidance emphasizing the impact of a recent cybersecurity incident and outlined key financial metrics. Consolidated revenue was reported at KRW 4,453.7 billion, reflecting a 0.5% year-over-year decline, while operating income increased by 13.8% to KRW 567.4 billion due to reduced marketing and depreciation costs as the 5G market matured. Net income slightly decreased by 0.1% to KRW 361.6 billion. The company highlighted growth in its AI business with a 15.6% revenue increase and AIDC business with KRW 102 billion in revenue, up 11.1% year-over-year. AIX revenue rose by 27.2% to KRW 45.2 billion. Shareholder returns remained stable with a first-quarter DPS set at KRW 831. The company emphasized a focus on customer protection and market stabilization in response to the cybersecurity incident, which led to a temporary suspension of new subscriber sign-ups and efforts to secure USIM chips.

Sk Telecom Financial Statement Overview

Summary
Sk Telecom demonstrates strong financial health with efficient cost management and robust cash flow generation. Although there is a moderate risk due to leverage, the company maintains steady revenue growth and operational efficiency.
Income Statement
75
Positive
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.
Balance Sheet
68
Positive
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.
Cash Flow
70
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue17.94T17.61T17.30T16.75T16.09T
Gross Profit12.93T12.74T12.44T12.11T11.70T
EBITDA5.16T5.09T4.96T5.06T4.98T
Net Income1.30T1.09T912.40B2.41T1.50T
Balance Sheet
Total Assets30.52T30.12T31.31T30.91T47.91T
Cash, Cash Equivalents and Short-Term Investments2.35T1.75T2.12T1.39T2.95T
Total Debt10.76T10.66T11.08T10.37T12.16T
Total Liabilities18.69T17.89T19.15T18.58T23.51T
Stockholders Equity11.70T10.99T11.32T11.58T23.74T
Cash Flow
Free Cash Flow2.53T1.87T2.11T1.72T2.13T
Operating Cash Flow5.09T4.95T5.16T5.03T5.82T
Investing Cash Flow0.00-3.35T-2.81T-3.49T-4.25T
Financing Cash Flow0.00-2.02T-1.35T-2.05T-1.46T

Sk Telecom Technical Analysis

Technical Analysis Sentiment
Positive
Last Price22.62
Price Trends
50DMA
21.77
Positive
100DMA
21.68
Positive
200DMA
21.95
Positive
Market Momentum
MACD
0.10
Positive
RSI
54.34
Neutral
STOCH
66.41
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 22.62 is below the 20-day moving average (MA) of 22.67, above the 50-day MA of 21.77, and above the 200-day MA of 21.95, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 54.34 is Neutral, neither overbought nor oversold. The STOCH value of 66.41 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 (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$17.35B11.8316.28%5.71%-5.14%-7.47%
77
Outperform
$17.70B17.337.95%0.40%-5.69%-0.05%
71
Outperform
$10.12B22.933.81%2.89%-4.85%-43.88%
69
Neutral
$8.68B9.7111.08%0.21%-4.13%4.96%
66
Neutral
¥379.06B14.952.24%2.39%5.43%-14.83%
62
Neutral
$27.57B9.21-7.17%0.44%0.89%-494.16%
59
Neutral
$30.27B-0.55%1.02%-2.29%-182.68%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SKM
Sk Telecom
22.62
0.75
3.43%
KT
KT
21.07
7.22
52.13%
TLK
PT Telekomunikasi Indonesia Tbk
17.57
-0.46
-2.55%
VIV
Telefonica Brasil
11.10
2.96
36.36%
TEF
Telefonica
5.35
1.06
24.71%
VOD
Vodafone
11.30
2.47
27.97%
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.Date of analysis: Jul 10, 2025