Telecom Argentina (TEO) AI Stock Analysis

• Market Cap: $3.69B
• Dividend Yield: 2.43%
• Average Volume (3M): 183.86K
• Price to Earnings (P/E): 22.5
• Beta (1Y): 0.57
• Revenue Growth: 3.89%
• EPS Growth: -107.44%
• Country: US
• Employees: 19,987
• Sector: Communication Services
• Sector Strength: 96
• Industry: Telecommunications Services
• EPS (TTM): -0.35
• Shares Outstanding: 125,611,600
• 10 Day Avg. Volume: 255,364
• 30 Day Avg. Volume: 183,862
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.77
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: <0.01
• Enterprise Value/Ebitda: <0.01
• 1Y Price Target: $9.57
• Price Target Upside: 14.34% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3

• Rating: 56 Neutral
• Price Target: $9.50 ▲(13.50% Upside)

Telecom Argentina's overall stock score is primarily influenced by its financial performance, which shows resilience in revenue growth and a strong asset base, despite challenges in profitability. Technical analysis indicates a bearish trend, while valuation concerns arise from a negative P/E ratio, partially offset by a moderate dividend yield.

Positive Factors

Acquisition and Market Structure

The acquisition of Telefonica’s assets in Argentina could result in sizeable synergies and relevant market repair, as the country would move to a two-player structure.

Business Growth Opportunities

TEO has solid growth optionalities in B2B, financial services, and international markets.

Negative Factors

Regulatory Challenges

The office of the Presidency of Argentina issued a note indicating resistance to this deal, suggesting that the government would take all relevant measures to prevent it.

Valuation Concerns

TEO’s stand-alone valuation is very demanding versus other LatAm telco peers.

Telecom Argentina Business Overview & Revenue Model

Company Description

Telecom Argentina S.A., together with its subsidiaries, provides telecommunications services in Argentina and internationally. The company offers telephone services, including local, domestic, and international long-distance telephone services, as well as public telephone services; and other related supplementary services, such as call waiting, call forwarding, conference calls, caller ID, voice mail, itemized billing, and maintenance services. It also provides interconnection services, such as traffic and interconnection resource, dedicated Internet access, video signals transportation in standard and high definitions, audio and video streaming, dedicated links, backhaul links for mobile operators, data center hosting/housing services, dedicated links, layer 2 and layer 3 transport networks, video links, value-added services, and other services. In addition, the company offers mobile telecommunications services, including voice communications, high-speed mobile Internet content and applications download, online streaming, and other services; and sells mobile communication devices, such as handsets, Modems MiFi and wingles, and smart watches under the Personal brand. Further, it provides internet connectivity products, including virtual private network services, traditional Internet protocol links, and other products; data services; and programming and other cable television services. The company was formerly known as Cablevisión S.A. and changed its name to Telecom Argentina S.A. in January 2018. Telecom Argentina S.A. was founded in 1979 and is based in Buenos Aires, Argentina.

How the Company Makes Money

Telecom Argentina generates revenue through multiple streams, primarily from its fixed-line and mobile telecommunications services. The company earns money from monthly subscriptions for landline and mobile services, pay-per-use data plans, and broadband internet services. Additionally, Telecom Argentina benefits from business solutions, including cloud services, data center offerings, and enterprise communication solutions, which cater to corporate clients. Significant revenue also comes from value-added services such as television and content distribution. The company has formed strategic partnerships with local and international content providers to enhance its service offerings, contributing to its earnings. Furthermore, the growing demand for data and digital services has positively impacted its revenue growth, particularly in mobile data services.

Telecom Argentina Financial Statement Overview

Summary

Telecom Argentina demonstrates resilience in revenue growth and a strong asset base, though profitability is challenged by negative EBIT. Cash flows are positive, signaling operational stability. The company should focus on improving profitability and optimizing cash conversion to further strengthen its financial position.

Income Statement

Telecom Argentina shows a mixed income statement performance. The gross profit margin is solid due to a high gross profit relative to revenue. However, the company struggles with negative EBIT and fluctuating net income, impacting net profit margins negatively. Despite these challenges, the company has shown significant revenue growth, indicating potential for recovery and expansion.

Balance Sheet

The balance sheet is relatively strong with a healthy equity ratio, indicating a solid asset base supported by equity. The debt-to-equity ratio is moderate, suggesting manageable leverage. However, there is room for improvement in enhancing overall asset utilization and reducing debt levels.

Cash Flow

Cash flow performance is steady with positive operating and free cash flows. The company has managed to improve free cash flow over time. However, the operating cash flow to net income ratio suggests room for greater efficiency in converting profits into cash.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.14T	2.06T	4.94T	2.58T	886.76B
Gross Profit	3.03T	1.51T	3.65T	1.89T	664.58B
EBITDA	2.89T	175.33B	216.96B	1.18T	297.50B
Net Income	1.01T	-257.73B	-647.21B	8.66B	-16.80B
Balance Sheet
Total Assets	10.94T	5.48T	5.38T	2.10T	1.14T
Cash, Cash Equivalents and Short-Term Investments	351.90B	283.74B	150.80B	59.67B	35.77B
Total Debt	3.09T	2.22T	1.55T	556.43B	316.94B
Total Liabilities	5.41T	3.23T	2.85T	1.03T	548.22B
Stockholders Equity	5.43T	2.17T	2.48T	1.05T	577.28B
Cash Flow
Free Cash Flow	417.29B	335.77B	285.09B	327.01B	134.05B
Operating Cash Flow	811.50B	617.70B	666.49B	788.80B	293.88B
Investing Cash Flow	-383.42B	-593.71B	-516.52B	-698.31B	-240.42B
Financing Cash Flow	-405.62B	106.65B	-310.58B	-123.12B	-105.30B

Telecom Argentina Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEO, the sentiment is Negative. The current price of 8.37 is below the 20-day moving average (MA) of 9.34, below the 50-day MA of 9.15, and below the 200-day MA of 10.85, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 38.96 is Neutral, neither overbought nor oversold. The STOCH value of 12.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TEO.

Telecom Argentina Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TKC	81 Outperform	$4.84B	11.12	7.38%	5.80%	19.25%	5.69%
VEON	74 Outperform	$3.82B	3.96	89.94%	―	8.66%	―
TLK	74 Outperform	$18.48B	13.19	17.71%	6.69%	-5.13%	-5.90%
PHI	70 Neutral	$4.30B	7.56	27.07%	8.46%	0.35%	19.08%
Sector *	60 Neutral	$46.28B	4.13	-13.12%	4.13%	1.85%	-42.71%
TEF	60 Neutral	$30.16B	―	-3.55%	6.74%	-4.73%	-251.31%
TEO	56 Neutral	$3.69B	22.47	-0.27%	2.43%	3.89%	-107.44%