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Millicom International Cellular SA (TIGO)
NASDAQ:TIGO
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Millicom International Cellular SA
(NASDAQ:TIGO)
Rating:71Outperform
Price Target:
$38.00
▲(4.40%Upside)
Millicom International Cellular SA (TIGO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.26B
Dividend Yield4.84%
Average Volume (3M)671.20K
Price to Earnings (P/E)17.5
Beta (1Y)0.25
Revenue Growth-1.52%
EPS Growth4874.58%
CountryUS
Employees14,000
SectorCommunication Services
Sector Strength89
IndustryTelecommunications Services
Share Statistics
EPS (TTM)1.14
Shares Outstanding172,096,300
10 Day Avg. Volume715,212
30 Day Avg. Volume671,203
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 Cap1.93
Enterprise Value/Revenue0.52
Enterprise Value/Gross Profit2.96
Enterprise Value/Ebitda1.28
Forecast
1Y Price Target
$40.63Price Target Upside11.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
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 primarily through its telecommunications services, which include mobile voice and data services, as well as fixed-line services such as cable TV and broadband internet. The company operates under subscription-based models for both mobile and cable services, securing steady revenue streams from individual and business customers. Additionally, Millicom has strategic partnerships with local and international companies to enhance its service offerings and expand its market reach, contributing to its earnings. The company's revenue model is further supported by its focus on bundling services, which encourages customer retention and increases the average revenue per user (ARPU).
Millicom International Cellular SA Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 7.00%|
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.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
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.85
Very Positive
Balance Sheet
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.70
Positive
Cash Flow
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.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Neutral
36.40
Price Trends
33.51
Positive
30.74
Positive
28.03
Positive
Market Momentum
0.79
Positive
59.11
Neutral
28.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TIGO, the sentiment is Neutral. The current price of 36.4 is below the 20-day moving average (MA) of 36.45, above the 50-day MA of 33.51, and above the 200-day MA of 28.03, indicating a neutral trend. The MACD of 0.79 indicates Positive momentum. The RSI at 59.11 is Neutral, neither overbought nor oversold. The STOCH value of 28.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 3 New Risks
1.
Risk Management Q4, 2023
2.
Information Security Q4, 2023
3.
Cybersecurity Risk Management Q4, 2023
Millicom International Cellular SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $8.79B | 14.32 | 13.18% | 6.89% | -6.63% | 2.46% | |
76 Outperform | $5.41B | 13.02 | 6.74% | 2.39% | 14.09% | -11.43% | |
72 Outperform | $4.75B | 8.85 | 28.10% | 5.56% | -0.91% | 11.25% | |
71 Outperform | $6.26B | 17.55 | 10.19% | 4.84% | -1.52% | 4874.58% | |
64 Neutral | $5.32B | ― | -0.84% | ― | -3.48% | -169.60% | |
61 Neutral | $14.78B | 5.89 | -4.32% | 3.67% | 2.75% | -30.30% | |
55 Neutral | $4.29B | 20.13 | 3.99% | ― | -12.77% | 40.80% |
* Communication Services Sector Average
Performance Comparison
TIGO
Millicom International Cellular SA
36.65
13.08
55.49%
PHI
PLDT
22.33
-0.85
-3.67%
TEO
Telecom Argentina
9.59
2.69
38.99%
TIMB
TIM
18.08
4.73
35.43%
TKC
Turkcell Iletisim
6.32
-0.93
-12.83%
USM
United States Cellular
61.23
9.14
17.55%
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.