Spark New Zealand (SPKKY) AI Stock Analysis

• Market Cap: $2.82B
• Dividend Yield: 9.74%
• Average Volume (3M): 3.24K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.33
• Revenue Growth: -5.72%
• EPS Growth: -57.16%
• Country: US
• Employees: 4,884
• Sector: Communication Services
• Sector Strength: 92
• Industry: Telecommunications Services
• EPS (TTM): 0.09
• Shares Outstanding: 377,864,500
• 10 Day Avg. Volume: 5,158
• 30 Day Avg. Volume: 3,237
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.13
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 5.70
• Enterprise Value/Ebitda: 6.09
• 1Y Price Target: $8.00
• Price Target Upside: 6.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 67 Neutral
• Price Target: $8.00 ▲(6.95% Upside)

The most significant factor is the financial performance, which demonstrates resilience but faces challenges with declining net income and higher leverage. Technical analysis suggests mixed signals with short-term bearishness but longer-term strength. Valuation is moderate, with a high dividend yield enhancing attractiveness. There are no notable earnings call details or corporate events affecting the score.

Spark New Zealand Business Overview & Revenue Model

Company Description

Spark New Zealand Limited, together with its subsidiaries, provides telecommunications and digital services in New Zealand. It offers telecommunications, information technology, media, and other digital products and services, including mobile services; voice services; broadband services; internet sports streaming services; cloud, security, and service. The company also provides IT infrastructure, business cloud, business and outsourced telecommunications, software, big data analytics, data center, and international wholesale telecommunications services. In addition, it offers local, national, and international telephone and data services; finance products; group insurance products; and mobile phone repair services. Further, the company retails telecommunications products and services; and distributes equipment. It serves consumers, households, small businesses, government, and large enterprises. The company was formerly known as Telecom Corporation of New Zealand Limited and changed its name to Spark New Zealand Limited in August 2014. Spark New Zealand Limited was incorporated in 1987 and is headquartered in Auckland, New Zealand.

How the Company Makes Money

Spark New Zealand generates revenue through multiple streams, primarily from its telecommunications services. The company's core revenue comes from its mobile services, which include prepaid and postpaid plans for consumers and businesses. Additionally, Spark earns income from its broadband and internet services, offering a variety of packages to meet different customer needs. The company also provides fixed-line telephony services, adding to its revenue base. Another significant source of income is its IT and managed services, which include cloud computing and data center solutions, catering to the needs of enterprise clients. Spark often collaborates with technology partners to enhance its service offerings and expand its market reach. The company's ability to innovate and adapt to changing market demands, along with strategic investments in network infrastructure and digital platforms, significantly contributes to its earnings.

Spark New Zealand Financial Statement Overview

Summary

Spark New Zealand demonstrates strong operational efficiencies and stable gross margins. However, declining net income impacts profitability and return on equity. The balance sheet's higher leverage poses potential risks, while robust operating cash flows support liquidity.

Income Statement

Spark New Zealand has demonstrated steady revenue performance over the years, although there was a decline in total revenue from $3.875 billion in 2023 to $3.759 billion in 2024. The gross profit margin remains strong, indicating effective cost management, with a margin of approximately 51.5% for 2024. However, the net profit margin decreased significantly from 29.3% in 2023 to 8.4% in 2024, primarily due to a substantial drop in net income. EBIT and EBITDA margins are strong, showing operational efficiency, but there's a need to address the drop in net income to ensure profitability.

Balance Sheet

The company's balance sheet shows moderate financial leverage with a debt-to-equity ratio of 1.48 in 2024, indicating a higher reliance on debt financing. The equity ratio is stable at around 34.3%, suggesting a balanced asset financing strategy. Return on equity has dropped from 58.5% in 2023 to 19.9% in 2024, highlighting pressure on profitability. The company needs to manage its debt levels and improve equity returns to enhance financial stability.

Cash Flow

Operating cash flow remains robust, slightly declining from $791 million in 2023 to $764 million in 2024, supporting the company's liquidity. Free cash flow decreased from $310 million to $164 million, reflecting higher capital expenditures. The operating cash flow to net income ratio is strong, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has weakened, suggesting a need for more effective cash management strategies.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	3.76B	3.88B	3.69B	3.56B	3.59B
Gross Profit	1.94B	2.01B	1.94B	1.89B	1.93B
EBITDA	1.10B	1.75B	1.18B	908.00M	1.14B
Net Income	316.00M	1.14B	410.00M	384.00M	427.00M
Balance Sheet
Total Assets	4.63B	4.48B	4.19B	4.11B	4.35B
Cash, Cash Equivalents and Short-Term Investments	59.00M	100.00M	71.00M	72.00M	53.00M
Total Debt	2.36B	1.83B	1.87B	1.87B	2.04B
Total Liabilities	3.04B	2.54B	2.71B	2.61B	2.85B
Stockholders Equity	1.59B	1.94B	1.48B	1.50B	1.49B
Cash Flow
Free Cash Flow	164.00M	310.00M	408.00M	461.00M	502.00M
Operating Cash Flow	764.00M	791.00M	833.00M	847.00M	895.00M
Investing Cash Flow	-550.00M	425.00M	-492.00M	-388.00M	-411.00M
Financing Cash Flow	-255.00M	-1.20B	-350.00M	-451.00M	-493.00M

Spark New Zealand Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPKKY, the sentiment is Positive. The current price of 7.48 is above the 20-day moving average (MA) of 7.46, above the 50-day MA of 7.35, and above the 200-day MA of 7.16, indicating a bullish trend. The MACD of 0.05 indicates Positive momentum. The RSI at 51.47 is Neutral, neither overbought nor oversold. The STOCH value of 49.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPKKY.

Spark New Zealand Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIV	79 Outperform	$19.90B	19.77	8.20%	3.56%	-6.51%	-0.21%
KT	74 Outperform	$9.67B	15.79	5.22%	3.62%	-1.22%	-19.08%
TLK	74 Outperform	$20.24B	13.99	17.71%	6.41%	-5.13%	-5.90%
SKM	68 Neutral	$8.60B	12.15	8.49%	4.40%	-4.74%	-16.23%
SPKKY	67 Neutral	$2.82B	23.06	12.67%	9.74%	-5.72%	-57.16%
Sector *	60 Neutral	$44.04B	1.91	-11.99%	3.99%	2.50%	-38.33%
TEO	59 Neutral	$4.26B	22.47	-0.27%	2.09%	3.89%	-107.44%