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Quebecor (TSE:QBR.B)
TSX:QBR.B
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Quebecor
(TSX:QBR.B)
79Outperform
Positive Factors
Dividend
Dividend raised 7.7% to $1.40, reflecting confidence in Quebecor's financial performance.
Financial Outlook
The company's attractive free cash flow profile and encouraging financial outlook contribute to a constructive view on the stock.
Market Share
Quebecor reported robust financial results ahead of expectations, with strong wireless market share gains.
Negative Factors
Cable Performance
Cable telecom service revenues fell 5.1% with internet posting a revenue decline of 4.3% due to sustained pricing battles.
Legacy Business Challenges
Quebecor’s legacy business in Quebec faces growth challenges given subscriber penetration levels and elevated competitive intensity.
Media Division
Media revenues were down -4.9% y/y, indicating challenges in the Media division.
Quebecor (QBR.B) vs. S&P 500 (SPY)
Market Cap
$8.50B
Dividend Yield3.6%
Average Volume (3M)1.27M
Price to Earnings (P/E)11.3
Beta (1Y)0.40
Revenue Growth3.76%
EPS Growth14.27%
CountryCA
Employees8,832
SectorCommunication Services
Sector Strength76
IndustryTelecommunications Services
Share Statistics
EPS (TTM)3.22
Shares Outstanding154,986,300
10 Day Avg. Volume851,537
30 Day Avg. Volume1,271,396
Financial Highlights & Ratios
PEG Ratio0.79
Price to Book (P/B)N/A
Price to Sales (P/S)2.04
Price to Cash Flow (P/CF)3.60
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.35Price Target Upside5.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Quebecor Business Overview & Revenue Model
Company DescriptionQuebecor Inc., together with its subsidiaries, operates in the telecommunications, media, and sports and entertainment businesses in Canada. Its Telecommunications segment offers television distribution, Internet access, wireline and mobile telephony, business solutions, and over-the-top video services; and Helix, a technology platform that provides entertainment and home management with features, including voice remote, ultra-intelligent Wi-Fi, and support for home automation. The company's Media segment is involved in the operation of over-the-air television network and specialty television services; provides soundstage and equipment rental, and post-production services for the film and television industries; prints, publishes, and distributes daily newspapers; operates news and entertainment digital platforms and a music streaming service; publishes and distributes magazines; produces and distributes audiovisual content; and operates an out-of-home advertising business. Its Sports and Entertainment segment engages in the show production, sporting, and cultural events management; publishing and distribution of books; distribution and production of music; and operation of two Quebec Major Junior Hockey League teams. The company was incorporated in 1965 and is headquartered in Montreal, Canada.
How the Company Makes MoneyQuebecor generates revenue through several key streams. Its telecommunications sector, led by Videotron, is a primary source of income, deriving revenue from subscription-based services such as internet, television, and mobile phone plans. The media sector contributes through advertising revenue, subscriptions, and content distribution, leveraging its television channels and publishing assets. Additionally, the sports and entertainment division adds to its earnings through event hosting and related activities. Strategic partnerships and investments also play a role in enhancing Quebecor's financial performance, alongside its focus on expanding its telecommunications infrastructure and media offerings.
Quebecor Financial Statement Overview
Summary
Quebecor exhibits strong financial health with solid revenue growth and profitability. The company maintains robust margins and effective cost control. However, high leverage poses a potential risk, necessitating careful management of financial obligations. Cash flow generation remains strong, supporting ongoing operations and potential expansion.Income Statement
Quebecor has demonstrated strong revenue growth with a 3.76% increase from 2023 to 2024. The gross profit margin is robust at 55.32%, indicating efficient cost management. However, the EBIT margin is notably absent for 2024, which could suggest operational challenges or accounting adjustments. Despite this, the net profit margin is healthy at 13.26%, reflecting effective bottom-line management.88
Very Positive
Balance Sheet
The company's debt-to-equity ratio is relatively high at 3.71, indicating significant leverage. Despite this, the return on equity stands at 34.65%, showcasing strong profitability relative to equity. The equity ratio is moderate at 16.60%, highlighting a balanced capital structure with potential risks from high leverage.75
Positive
Cash Flow
Operating cash flow has shown consistent growth, with a 17.60% increase from 2023 to 2024. The free cash flow to net income ratio is strong at 1.10, indicating efficient cash generation relative to net income. However, free cash flow has decreased by 8.70% compared to the previous year, which may impact future investments or debt repayments.83
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.64B | 5.43B | 4.53B | 4.55B | 4.32B | Gross Profit |
| 3.12B | 2.99B | 2.63B | 2.66B | 2.59B | EBIT |
| 0.00 | 1.33B | 1.16B | 1.19B | 1.15B | EBITDA |
| 2.34B | 2.18B | 1.89B | 1.89B | 1.92B | Net Income Common Stockholders |
| 747.50M | 650.50M | 599.70M | 578.40M | 607.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 61.80M | 11.10M | 6.60M | 64.70M | 136.70M | Total Assets |
| 13.00B | 12.74B | 10.63B | 10.76B | 9.86B | Total Debt |
| 8.00B | 8.17B | 6.83B | 6.86B | 6.10B | Net Debt |
| 7.94B | 8.16B | 6.82B | 6.79B | 5.96B | Total Liabilities |
| 10.73B | 10.90B | 9.14B | 9.38B | 8.65B | Stockholders Equity |
| 2.16B | 1.73B | 1.36B | 1.26B | 1.11B |
| Cash Flow | Free Cash Flow | |||
| 820.60M | 898.90M | 653.10M | -265.40M | 778.40M | Operating Cash Flow |
| 1.72B | 1.46B | 1.26B | 1.18B | 1.43B | Investing Cash Flow |
| -921.90M | -2.68B | -631.30M | -1.54B | -713.90M | Financing Cash Flow |
| -712.20M | 1.18B | -812.60M | 281.90M | -602.00M |
Quebecor Technical Analysis
Positive
36.34
Price Trends
34.85
Positive
33.21
Positive
32.69
Positive
Market Momentum
0.27
Positive
59.03
Neutral
88.16
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:QBR.B, the sentiment is Positive. The current price of 36.34 is above the 20-day moving average (MA) of 35.99, above the 50-day MA of 34.85, and above the 200-day MA of 32.69, indicating a bullish trend. The MACD of 0.27 indicates Positive momentum. The RSI at 59.03 is Neutral, neither overbought nor oversold. The STOCH value of 88.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:QBR.B.
Quebecor Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Performance Comparison
TSE:QBR.B
Quebecor
36.34
9.00
32.94%
BCE
BCE
22.01
-7.77
-26.09%
RCI
Rogers Communication
25.24
-11.28
-30.89%
TU
Telus
15.04
0.03
0.20%
TSE:QBR.A
Quebecor Inc Cl A MV
36.00
7.24
25.17%
CGEAF
Cogeco Communications
46.66
9.02
23.96%
Quebecor Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 11.39% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
Quebecor demonstrated strong financial performance with significant cash flow and EBITDA growth, supported by impressive wireless subscriber gains and improved customer satisfaction. However, regulatory challenges and competitive pricing pressures present ongoing risks, particularly in the wireline and media segments.Highlights
Record Cash Flow and EBITDA Growth
Cash flow increased by 17% in Q4 and 18% for the full year 2024. EBITDA grew by 4% in Q4 and 6% for the year, reflecting strong financial performance despite competitive challenges.
Strong Wireless Subscriber Growth
Quebecor added 88,000 net new wireless lines in Q4 2024 and 373,000 for the year, achieving a 10% year-over-year growth in wireless subscribers, reaching over 4.1 million total subscribers.
Improved Customer Satisfaction
Videotron, Fizz, and Freedom Mobile achieved top rankings in customer satisfaction surveys, with significant reductions in customer complaints and maintaining the lowest churn rate in the industry.
Investment in Network and Technology
Quebecor expanded its wireless network with 180 new sites and announced plans to build 37 new infrastructures, while also launching 5G+ technology access for all Freedom Mobile plans.
Media Segment EBITDA Improvement
TVA Group's adjusted EBITDA improved significantly by $17 million compared to the previous year, driven by the return of major productions and restructuring efforts.
Lowlights
Regulatory Challenges
Quebecor faces regulatory challenges with CRTC's pricing decisions, which are seen as unfavorable compared to competitors like TELUS, affecting market competitiveness in Western Canada.
Pressure on ARPU
Consolidated wireless ARPU decreased by $1.93 to $34.36 in Q4, primarily due to promotional discounts and competitive pricing pressures from the Big 3 telecom operators.
Wireline Subscriber Base Decline
Quebecor's Internet customer base declined by 2,000 in Q4, despite a year-over-year growth of 5,000, highlighting the competitive pressures in the wireline market.
Challenges in Media Advertising Revenue
Continued decline in advertising revenues in the Media segment, consistent with global industry trends, despite improvements in operating results.
Company Guidance
During the Quebecor Inc. conference call discussing the financial results for the fourth quarter and full year of 2024, several key metrics were highlighted. Quebecor reported a 17% increase in cash flow for Q4 and an 18% increase for the entire year. EBITDA grew by 4% in Q4 and 6% for the year, demonstrating strong profitability. The leverage ratio decreased to 3.31x, marking the lowest among the top four telecom operators in Canada. The company also achieved significant growth in wireless subscribers, ending the year with 373,000 net new lines, a 10% increase year-over-year, bringing the total to over 4.1 million subscribers. Despite these achievements, the average revenue per user (ARPU) decreased by $1.93 to $34.36 in Q4, mainly due to the dilutive impact of Freedom Mobile's prepaid services and aggressive pricing strategies from competitors. The company also announced a quarterly dividend increase to $0.35 per share, reflecting an 8% rise. Quebecor's disciplined capital allocation strategy allowed it to reduce its debt, maintain a solid balance sheet, and continue investing in network expansions and customer service improvements.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.