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Rogers Communication (TSE:RCI.B)
TSX:RCI.B
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Rogers Communication
(TSX:RCI.B)
75Outperform
Positive Factors
Operational Performance
Postpaid phone churn came in at 1.53% compared to 1.67% last year, a positive lead indicator in our view.
Subscriber Growth
RCI is managing the current environment well as it delivers healthy subscriber growth while limiting ARPU downside better than its peers.
Negative Factors
Debt Concerns
Higher than originally forecast leverage is a concern for the company.
Financial Guidance
Guidance for 2025 was cautious and slightly below Street EBITDA expectations, reflective of still challenged industry conditions.
Structured Equity Financing
Structured equity financing remains at overhang, raising concerns around a credit rating downgrade.
Rogers Communication (RCI.B) vs. S&P 500 (SPY)
Market Cap
$21.38B
Dividend Yield5.35%
Average Volume (3M)1.85M
Price to Earnings (P/E)12.0
Beta (1Y)0.80
Revenue Growth6.71%
EPS Growth96.70%
CountryCA
Employees24,000
SectorCommunication Services
Sector Strength78
IndustryTelecommunications Services
Share Statistics
EPS (TTM)3.25
Shares Outstanding426,892,270
10 Day Avg. Volume1,777,033
30 Day Avg. Volume1,854,143
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)N/A
Price to Sales (P/S)1.11
Price to Cash Flow (P/CF)4.00
P/FCF Ratio7.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$51.93Price Target Upside35.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Rogers Communication Business Overview & Revenue Model
Company DescriptionRogers Communications Inc. (RCI.B) is a leading Canadian telecommunications and media company that operates in three primary segments: Wireless, Cable, and Media. The company provides a comprehensive suite of communications services, including wireless voice and data services, cable television, internet, and home phone services. Rogers also owns and operates a variety of media assets, including radio and television broadcasting, digital media, and sports entertainment. Headquartered in Toronto, Ontario, Rogers Communications is one of Canada's largest and most diversified communications and media companies.
How the Company Makes MoneyRogers Communications generates revenue through multiple streams across its business segments. The Wireless segment is a significant revenue driver, earning money from providing mobile voice and data services to consumers and businesses, with income from monthly service plans, device sales, and roaming charges. The Cable segment contributes through subscription fees for cable television, high-speed internet, and home phone services. Additionally, Rogers earns from its Media segment by selling advertising on its television and radio stations, digital media platforms, and through subscription revenues from its sports and entertainment offerings. Strategic partnerships, such as those with content providers and sports leagues, as well as investments in network infrastructure, further support its revenue generation and growth.
Rogers Communication Financial Statement Overview
Summary
Rogers Communication shows strong revenue and profit growth, supported by efficient operations and robust cash flow generation. However, the high leverage is a concern, though it is managed with a solid return on equity. Focus on reducing debt could enhance financial stability.Income Statement
Rogers Communication has shown strong revenue growth of 6.71% from 2023 to 2024, indicating a solid upward trajectory. The gross profit margin stands at 46.68%, highlighting efficient cost management. However, the absence of EBIT in 2024 reduces visibility into operating profitability, despite a robust EBITDA margin of 44.20%. The net profit margin of 8.42% is healthy, showing good profitability.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio is high at 4.58, indicating significant leverage which could pose financial risk. However, the equity ratio of 14.57% shows a reasonable share of equity in the capital structure. Return on equity is solid at 16.67%, reflecting good returns for shareholders despite the high debt load.70
Positive
Cash Flow
Free cash flow has grown by 36.47%, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is a robust 3.27, indicating good cash conversion. The free cash flow to net income ratio of 0.87 suggests that a substantial portion of earnings is converted into free cash flow, although there's room for improvement.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 20.60B | 19.31B | 15.40B | 14.65B | 13.92B | Gross Profit |
| 9.62B | 8.58B | 6.39B | 5.89B | 5.86B | EBIT |
| 0.00 | 4.46B | 3.77B | 3.23B | 3.21B | EBITDA |
| 9.11B | 7.61B | 6.19B | 5.66B | 5.76B | Net Income Common Stockholders |
| 1.73B | 849.00M | 1.68B | 1.56B | 1.59B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 898.00M | 800.00M | 463.00M | 715.00M | 2.48B | Total Assets |
| 71.41B | 69.28B | 55.66B | 41.96B | 38.85B | Total Debt |
| 47.63B | 45.20B | 36.75B | 22.84B | 21.26B | Net Debt |
| 46.73B | 44.40B | 36.28B | 22.13B | 18.77B | Total Liabilities |
| 61.01B | 58.84B | 45.56B | 31.43B | 29.28B | Stockholders Equity |
| 10.40B | 10.44B | 10.09B | 10.53B | 9.57B |
| Cash Flow | Free Cash Flow | |||
| 1.51B | 1.10B | 1.37B | 1.32B | 1.95B | Operating Cash Flow |
| 5.68B | 5.22B | 4.49B | 4.16B | 4.32B | Investing Cash Flow |
| -4.46B | -20.20B | -3.26B | -6.13B | -2.56B | Financing Cash Flow |
| -1.13B | 2.48B | 11.36B | 203.00M | 227.00M |
Rogers Communication Technical Analysis
Negative
38.43
Price Trends
39.77
Negative
42.98
Negative
47.23
Negative
Market Momentum
-0.28
Positive
36.83
Neutral
19.22
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCI.B, the sentiment is Negative. The current price of 38.43 is below the 20-day moving average (MA) of 39.84, below the 50-day MA of 39.77, and below the 200-day MA of 47.23, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 36.83 is Neutral, neither overbought nor oversold. The STOCH value of 19.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:RCI.B.
Rogers Communication Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $8.50B | 11.25 | 38.85% | 3.74% | 3.76% | 14.27% | |
77 Outperform | $2.89B | 8.32 | 11.48% | 5.38% | -0.07% | -1.48% | |
75 Outperform | $21.38B | 12.03 | 16.66% | 5.35% | 6.71% | 96.70% | |
73 Outperform | C$21.38B | 13.03 | 16.64% | 4.73% | 6.71% | 96.70% | |
67 Neutral | $30.95B | 30.63 | 6.26% | 7.95% | 0.67% | 15.00% | |
61 Neutral | $30.30B | 183.94 | 1.80% | 12.68% | -1.07% | -92.15% | |
59 Neutral | $27.87B | 0.90 | -19.24% | 4.15% | 2.11% | -44.59% |
* Communication Services Sector Average
Performance Comparison
TSE:RCI.B
Rogers Communication
38.43
-13.42
-25.88%
TSE:T
Telus
20.64
0.46
2.28%
TSE:BCE
BCE
33.03
-7.47
-18.44%
TSE:CCA
Cogeco Communications
70.18
16.02
29.59%
TSE:QBR.B
Quebecor
36.31
8.76
31.81%
TSE:RCI.A
Rogers Comm Cl A
42.78
-10.96
-20.39%
Rogers Communication Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -6.16% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
Rogers demonstrated strong operational performance with leading subscriber growth and financial metrics in 2024. However, challenges such as market size decline, video subscriber loss, and delays in key transactions present notable headwinds.Highlights
Strong Subscriber Growth
In 2024, Rogers added a combined 623,000 wireless and Internet net additions, leading the industry with more subscribers choosing Rogers over competitors.
Financial Performance and Free Cash Flow
Achieved highest wireless and cable margins, with adjusted EBITDA growth of 6% in Q4 and a 26% increase in free cash flow.
Media Revenue Growth
Media revenue increased by 10% with adjusted EBITDA reaching $53 million, despite a softer advertising market.
Network Leadership and Investments
Rogers was awarded Canada's most reliable networks and advanced several industry firsts, including DOCSIS 4.0 trials and 5G network slicing.
MLSE Stake Acquisition
Announced agreement to purchase Bell's 37.5% stake in MLSE, increasing Rogers' ownership to a majority 75%.
Lowlights
Wireless Market Size Decline
Market size in Q4 was estimated to be down by 25% to 30% year-on-year, affecting net additions despite Rogers' strong market share performance.
Video Subscriber Decline
Video subscribers declined by 35,000 year-over-year, reflecting a shift in customer viewing preferences.
Balance Sheet and Debt Leverage
Debt leverage ratio was at 4.5 times, above the targeted 4.2 times by year-end, partly due to slower-than-expected asset sales.
Pending Approvals for MLSE Transaction
Awaiting league and CRTC approvals for the MLSE transaction, causing delays in finalizing the acquisition.
Company Guidance
During the Rogers Communications Fourth Quarter 2024 Results Conference Call, the company reported robust performance metrics and provided guidance for 2025. In 2024, Rogers achieved industry-leading results with a 26% growth in free cash flow and substantial wireless and cable additions. Wireless service revenue grew by 2%, while adjusted EBITDA increased by 6%, with the company adding 95,000 net postpaid and prepaid phone subscribers. The wireless margin was impressive at 66%, with a stable blended ARPU of $58. Cable operations returned to growth, achieving a record margin of 59% in Q4, with internet net additions increasing by 30%. Media revenue rose by 10%, with adjusted EBITDA hitting $53 million. Looking ahead to 2025, Rogers anticipates single-digit growth in service revenue, adjusted EBITDA, and free cash flow, supported by approximately $4 billion in capital investments. The company aims to maintain its market leadership by balancing subscriber growth with financial performance amidst a competitive environment.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.