Millicom International Cellular SA (TIGO) AI Stock Analysis

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Millicom International Cellular SA

(NASDAQ:TIGO)

71Outperform

Millicom International Cellular SA has a solid financial foundation, with strong operational efficiency and cash flow generation supporting future growth. The stock demonstrates positive technical momentum, although valuations are influenced by leverage and currency impacts. The recent earnings call underscores strategic improvements and growth prospects. These factors combine to reflect a moderately strong stock performance outlook.

Millicom International Cellular SA (TIGO) vs. S&P 500 (SPY)

Market Cap

$6.03B

Dividend Yield4.99%

Average Volume (3M)993.21K

Price to Earnings (P/E)16.9

Beta (1Y)0.24

Revenue Growth-1.52%

EPS Growth4874.58%

CountryUS

Employees14,000

SectorCommunication Services

Sector Strength87

IndustryTelecommunications Services

Share Statistics

EPS (TTM)1.14

Shares Outstanding172,096,300

10 Day Avg. Volume685,306

30 Day Avg. Volume993,212

Financial Highlights & Ratios

PEG Ratio0.37

Price to Book (P/B)1.65

Price to Sales (P/S)0.00

P/FCF Ratio6.82

Enterprise Value/Market Cap2.00

Enterprise Value/Revenue0.52

Enterprise Value/Gross Profit2.96

Enterprise Value/Ebitda1.28

Forecast

1Y Price Target

$38.00

Price Target Upside6.15% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Millicom International Cellular SA Business Overview & Revenue Model

Company DescriptionMillicom International Cellular S.A. provides cable and mobile services in Latin America and Africa. The company offers mobile services, including mobile data and voice; short message service; and mobile financial services, such as payments, money transfers, international remittances, savings, real-time loans, and micro-insurance. It also provides cable and other fixed services, including broadband, content, fixed voice, and pay-TV to residential consumers; and fixed, managed services, cloud and security solutions, and value-added services to small, medium, and large businesses, as well as governmental entities. As of December 31, 2021, the company served 44.9 million mobile customers; and 12.7 million cable homes. It markets its products and services under Tigo and Tigo Business brands. The company was founded in 1990 and is headquartered in Luxembourg.

How the Company Makes MoneyMillicom International Cellular SA generates revenue through a diversified business model centered around its telecommunications and digital services. The company earns money primarily from mobile voice and data services, where customers pay for monthly subscriptions, prepaid plans, and data packages. Additionally, Millicom derives income from its fixed broadband internet services, offering high-speed internet plans to residential and business customers. The digital television segment contributes to revenue through subscription fees for cable and satellite TV packages. Millicom also engages in business-to-business solutions, providing cloud services, managed services, and other enterprise solutions to corporate clients. Strategic partnerships, particularly in network infrastructure and digital content, enhance its service offerings and market reach, further bolstering revenue streams.

Millicom International Cellular SA Financial Statement Overview

Summary

Millicom International Cellular SA exhibits strong financial performance, with notable improvements in revenue growth, profitability, and cash flow generation. The company's gross profit and EBIT margins are strong, and there is a significant rebound in net profit margin. However, a high debt-to-equity ratio presents a risk, although improvements in return on equity indicate better equity utilization.

Income Statement

Very Positive

Millicom International Cellular SA has shown a strong performance in its income statement. The company achieved a noticeable revenue growth rate of 2.53% from 2023 to 2024, and its gross profit margin improved significantly to 75.54%. The net profit margin saw a substantial recovery from -1.45% in 2023 to 4.36% in 2024, demonstrating a significant rebound in profitability. Moreover, EBIT margin increased to 23.12%, and EBITDA margin stood at 39.92%, indicating robust operational performance.

Balance Sheet

Positive

The balance sheet of Millicom International Cellular SA shows a mixed picture. The debt-to-equity ratio is high at 1.89, reflecting significant leverage, which could pose a risk. However, the return on equity improved to 6.97% in 2024, indicating better utilization of equity. The equity ratio is relatively stable at 26.42%, suggesting a balanced approach towards financing.

Cash Flow

Positive

The cash flow statement presents a positive outlook with a remarkable free cash flow growth rate of 2557.5% from 2023 to 2024, driven by improved operating cash flow. The operating cash flow to net income ratio is strong, demonstrating efficient cash generation relative to reported earnings. However, the free cash flow to net income ratio is lower at 4.20, indicating some discrepancy between cash flows and accounting profits.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.80B	5.66B	5.62B	4.62B	4.17B
	Gross Profit
4.38B	2.20B	4.12B	3.31B	3.00B
	EBIT
1.34B	826.00M	915.00M	659.00M	446.00M
	EBITDA
2.32B	2.11B	2.17B	2.16B	1.38B
	Net Income Common Stockholders
253.00M	-82.00M	16.00M	590.00M	-373.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
699.00M	775.00M	1.04B	895.00M	1.03B
	Total Assets
13.74B	14.52B	14.20B	15.14B	12.42B
	Total Debt
6.77B	7.74B	7.82B	8.91B	6.71B
	Net Debt
6.07B	6.96B	6.78B	8.02B	5.84B
	Total Liabilities
10.16B	11.07B	10.56B	12.40B	10.15B
	Stockholders Equity
3.63B	3.53B	3.60B	2.58B	2.06B
Cash Flow		Free Cash Flow
834.00M	40.00M	212.00M	48.00M	-3.00M
	Operating Cash Flow
1.60B	1.22B	1.28B	956.00M	821.00M
	Investing Cash Flow
-604.00M	-1.10B	-1.10B	-2.70B	-495.00M
	Financing Cash Flow
-1.07B	-377.00M	-1.00M	1.78B	-598.00M

Millicom International Cellular SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price35.80

Price Trends

50DMA

31.19

Positive

100DMA

28.62

Positive

200DMA

26.99

Positive

Market Momentum

MACD

1.27

Negative

RSI

72.68

Negative

STOCH

89.10

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TIGO, the sentiment is Positive. The current price of 35.8 is above the 20-day moving average (MA) of 33.78, above the 50-day MA of 31.19, and above the 200-day MA of 26.99, indicating a bullish trend. The MACD of 1.27 indicates Negative momentum. The RSI at 72.68 is Negative, neither overbought nor oversold. The STOCH value of 89.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TIGO.

Millicom International Cellular SA Risk Analysis

Millicom International Cellular SA disclosed 35 risk factors in its most recent earnings report. Millicom International Cellular SA 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

Millicom International Cellular SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIMB	80 Outperform	$8.46B	14.07	13.18%	6.43%	-6.63%	2.46%
TKC	78 Outperform	$5.46B	13.19	6.74%	2.40%	14.09%	-11.43%
PHI	73 Outperform	$4.94B	8.94	29.05%	5.35%	-0.15%	17.96%
TIGO	71 Outperform	$6.03B	16.89	10.19%	4.99%	-1.52%	4874.58%
TEO	68 Neutral	$4.85B	5.21	23.27%	―	-26.74%	―
USM	64 Neutral	$5.13B	―	-0.84%	―	-3.48%	-169.60%
Sector *	60 Neutral	$14.02B	6.62	-2.88%	3.71%	2.35%	-37.08%

* Communication Services Sector Average

Performance Comparison

TIGO

Millicom International Cellular SA

35.80

12.80

55.65%

PHI

PLDT

23.51

-0.95

-3.88%

TEO

Telecom Argentina

11.10

2.33

26.57%

TIMB

TIM

17.31

1.74

11.18%

TKC

Turkcell Iletisim

6.30

-0.21

-3.23%

USM

United States Cellular

61.03

15.93

35.32%

Millicom International Cellular SA Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 5.23%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call presented a strong performance in customer growth, profitability, and strategic M&A progress, countered by challenges in revenue growth due to currency impacts and tough prior year comparisons. Debt management showed improvements despite a slight increase in leverage.

Q1-2025 Updates

Positive Updates

Strong Customer Growth and Profitability

Postpaid net adds increased by nearly 50,000 from a year ago, and home net adds turned positive with 62,000 compared to a decline of 13,000 last year. The OCF margin rose by almost two percentage points to 36.7%, and equity-free cash flow was $135 million in Q1, typically the weakest quarter for cash flow generation.

Improved B2B and Home Business Performance

B2B business grew at a 4% CAGR over the past two years, driven by an 18% increase in digital solutions. Home broadband customer base increased by almost 7%, and one-third of home customers are now convergent, compared to one-quarter a year ago.

Profitability in Key Markets

Adjusted EBITDA margin in Colombia reached 39.1%, up more than two percentage points year-over-year. In Panama, the adjusted EBITDA margin reached a record 51.2%, and the OCF in Guatemala grew 10% to a record $190 million.

M&A Progress and Strategic Initiatives

Received antitrust approval in Nicaragua and closed that portion of the LAT International sale to SBA. Entered a new agreement to sell Lati Paraguay operations to Atis Group. Signed a binding agreement with Telefonica to acquire their stake in Coltel.

Debt Management and Efficiency Improvements

Equity-free cash flow improved by $172 million compared to last year due to better control over working capital. Efforts to reduce FX exposure and volatility, including replacing dollar-denominated debt with local currency debt.

Negative Updates

Service Revenue Decline

Service revenue was down 6.6% to $1.29 billion, impacted by weaker foreign exchange rates and the devaluation of the Boliviano. Excluding FX, organic service revenue was flat.

Challenging Comparisons and Slower Growth

B2B services declined 6.4% organically due to large projects in Panama the previous year. Service revenue in Guatemala slowed due to tough year-on-year comparisons, affecting mobile business.

Debt and Leverage Concerns

Net debt increased by $101 million during Q1, and leverage increased slightly to 2.47x, influenced by shareholder remuneration including dividends and share repurchase programs.

Company Guidance

During the call, the company provided several key metrics and guidance for fiscal year 2025. The postpaid net additions reached 262,000, which marked an increase of nearly 50,000 from the previous year, while home net additions were 62,000, up from a decline of 13,000 in Q1 of the prior year. The company also reported an improvement in operating cash flow (OCF) margin, which rose by almost two percentage points to 36.7%. Equity-free cash flow was robust at $135 million, notwithstanding the typical seasonality of the first quarter being the weakest for cash flow generation. The company maintained its leverage at 2.47x, despite increases due to dividend impacts and a share buyback program. Additionally, service revenue for the quarter was $1.29 billion, down 6.6% from the previous year due to foreign exchange fluctuations, with organic service revenue remaining flat. The CEO and CFO reiterated the targets for 2025, including an equity-free cash flow of around $750 million and maintaining leverage below 2.5x, indicating confidence in sustained revenue growth driven by postpaid mobile expansions and B2B services.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.