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Rogers Communication (TSE:RCI.B)
TSX:RCI.B

Rogers Communication (RCI.B) AI Stock Analysis

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Rogers Communication

(TSX:RCI.B)

Rating:72Outperform
Price Target:
C$48.00
▲(8.72%Upside)
Rogers Communications exhibits strong financial performance and an attractive valuation. The technical analysis suggests bullish momentum, but caution is advised due to overbought indicators. Earnings call insights are mixed, with solid performance tempered by subscriber declines. Overall, the company is in a solid position with manageable risks.
Positive Factors
Financial Performance
Rogers is making good progress addressing high leverage with the closing of its C$7bn structured equity transaction.
Media Revenue
Media will be a bright spot, as hockey playoff-related revenues are expected to result in year-over-year revenue growth.
Sports Assets
Rogers' share price is positioned for material upside as the process of crystallizing value for its sports assets rolls along.
Negative Factors
Postpaid Market
Street estimates of +43k post-paid net adds appear overly optimistic.
Subscriber Dynamics
Rogers continues to manage negative subscriber base repricing as subscribers come off contract into an environment with lower prices.
Wireless Market
Wireless volumes and prices remain under pressure with no clear positive inflection point expected.

Rogers Communication (RCI.B) vs. iShares MSCI Canada ETF (EWC)

Rogers Communication Business Overview & Revenue Model

Company DescriptionRogers Communications Inc. operates as a communications and media company in Canada. It operates through three segments: Wireless, Cable, and Media. The company offers mobile Internet access, wireless voice and enhanced voice, device and accessory financing, wireless home phone, device protection, e-mail, global voice and data roaming, bridging landline, machine-to-machine and Internet of Things solutions, and advanced wireless solutions for businesses, as well as device delivery services; and postpaid and prepaid services under the Rogers, Fido, and chatr brands to approximately 11.3 million subscribers. It also provides Internet and WiFi services; smart home monitoring services, such as monitoring, security, automation, energy efficiency, and smart control through a smartphone app. In addition, the company offers local and network TV; on-demand television; cloud-based digital video recorders; voice-activated remote controls, and integrated apps; personal video recorders; linear and time-shifted programming; digital specialty channels; 4K television programming; and televised content on smartphones, tablets, and personal computers, as well as operates Ignite TV and Ignite TV app. Further, it provides residential and small business local telephony services; calling features, such as voicemail, call waiting, and long distance; voice, data networking, Internet protocol, and Ethernet services; private networking, Internet, IP voice, and cloud solutions; optical wave and multi-protocol label switching services; IT and network technologies; and cable access network services. The company also owns Toronto Blue Jays and the Rogers Centre event venue; and operates Sportsnet ONE, Sportsnet 360, Sportsnet World, Citytv, OMNI, FX (Canada), FXX (Canada), and OLN television networks, as well as 55 AM and FM radio stations. The company was founded in 1960 and is headquartered in Toronto, Canada.
How the Company Makes MoneyRogers Communications generates revenue through several key streams. The largest portion comes from its wireless segment, which provides mobile voice and data services to individual consumers and businesses. This includes revenue from monthly subscription fees, data usage, and device sales. Another significant revenue stream is its cable segment, offering television, internet, and home phone services to residential customers. Rogers also earns money through its media segment by selling advertising on its television and radio stations, as well as through subscriptions and advertising on its digital platforms. Moreover, the company benefits from its ownership of sports teams and venues, generating income from ticket sales, sponsorships, and broadcast rights. Strategic partnerships and investments in technology infrastructure, such as 5G networks, also play a crucial role in enhancing service offerings and driving growth.

Rogers Communication Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: 27.46%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, network reliability, and progress in deleveraging efforts. However, challenges such as a decline in wireless subscribers, cable service revenue, and ARPU were noted. Overall, the positive aspects slightly outweigh the negative ones.
Q1-2025 Updates
Positive Updates
Growth in Service Revenue and Adjusted EBITDA
Rogers Communications reported a 2% growth in both service revenue and adjusted EBITDA year-over-year, with improved margins.
Subscriber Growth in Cable & Wireless
The company achieved 57,000 Wireless and Internet net additions, focusing on price discipline and profitable subscriber growth.
Deleveraging Efforts
Rogers attracted $9 billion of equity capital, reducing leverage from 4.5 times at the end of 2024 to 3.6 times, making progress towards its goal of returning leverage to 3.5 times post-Shaw merger.
Network Reliability Recognition
Rogers was awarded the most reliable 5G wireless network in Canada by Ooma for the seventh straight year and was also recognized by Opensignal for network reliability.
Strong Performance in Sports and Media
Rogers Sports and Media delivered a 24% revenue growth, boosted by additional Toronto Blue Jays home games and advertising revenue from the Four Nations Hockey Tournament.
Negative Updates
Decline in Wireless Subscribers
Net new wireless subscribers decreased to 34,000 from 61,000 last year, reflecting a smaller market size due to reduced immigration.
Cable Service Revenue Decline
Cable service revenue fell by 1% due to competitive promotional activity and customer churn in satellite and video subscribers.
Challenges in Wireless ARPU
Blended mobile phone ARPU decreased by just under 2% due to competitive intensity and lower roaming revenue, driven by reduced travel to the US.
Company Guidance
During the first quarter of 2025, Rogers Communications reported a 2% year-over-year growth in both service revenue and adjusted EBITDA, highlighting solid financial performance despite a competitive market environment and lower immigration rates. The company achieved notable margin improvements and continued its deleveraging efforts, reducing its leverage ratio to 3.6 times from 4.5 times at the end of 2024. Wireless and Internet net additions reached 57,000, with Q1 representing approximately 10% of annual subscriber growth for the industry. Rogers emphasized its focus on disciplined execution, delivering efficiencies, and advancing its strategy to enhance the value of its sports assets. The company also completed a successful $4 billion hybrid securities offering and announced a $7 billion equity investment, which are expected to further strengthen its balance sheet. Additionally, Rogers was recognized for having Canada's most reliable 5G wireless network for the seventh consecutive year.

Rogers Communication Financial Statement Overview

Summary
Rogers Communication shows strong financial health with robust revenue and profit growth, efficient operational margins, and solid cash flow generation. However, high leverage and debt levels present potential risks, although they are mitigated by strong returns and cash flows.
Income Statement
82
Very Positive
Rogers Communication's income statement shows a strong performance with a consistent increase in total revenue, from $13.9B in 2020 to $20.7B TTM (Trailing-Twelve-Months) in 2025. The Gross Profit Margin is healthy at 46.7% TTM, indicating effective control over cost of goods sold. The Net Profit Margin improved significantly from 11.4% in 2020 to 8.5% TTM, reflecting good profitability. Revenue growth rate is positive, demonstrating steady expansion. EBIT and EBITDA margins are robust, at 24.1% and 44.6% TTM respectively, highlighting strong operational efficiency. Overall, the company shows a solid trajectory in revenue and profitability growth, with minor fluctuations.
Balance Sheet
75
Positive
The balance sheet of Rogers Communication reveals a moderate risk profile. The Debt-to-Equity Ratio is high at approximately 4.64 TTM, suggesting significant leverage. However, the company maintains stable Stockholders' Equity which increased over the years. The Return on Equity is commendable at 16.5% TTM, indicating efficient use of equity to generate profits. The Equity Ratio stands at 14.5% TTM, which is low, reflecting high reliance on debt financing. While the high leverage poses potential risks, the company has demonstrated capacity to generate adequate returns.
Cash Flow
78
Positive
Rogers Communication's cash flow statement indicates strong cash generation capability with Operating Cash Flow at $5.8B TTM. The Free Cash Flow improved from $1.1B in 2023 to $1.7B TTM, showing positive growth. The Operating Cash Flow to Net Income Ratio is favorable at 3.3, indicating efficient conversion of net income to cash. The Free Cash Flow to Net Income Ratio is 0.96, suggesting that nearly all of the net income is translated into free cash flow. These metrics reflect the company's strong cash position, despite high capital expenditures.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue20.68B20.60B19.31B15.40B14.65B13.92B
Gross Profit9.66B9.62B8.58B6.39B5.89B5.86B
EBITDA9.25B9.26B7.61B6.19B5.66B5.76B
Net Income1.76B1.73B849.00M1.68B1.56B1.59B
Balance Sheet
Total Assets73.12B71.41B69.28B55.66B41.96B38.85B
Cash, Cash Equivalents and Short-Term Investments2.68B898.00M800.00M463.00M715.00M2.48B
Total Debt49.35B47.63B45.20B36.75B22.84B21.26B
Total Liabilities62.49B61.01B58.84B45.56B31.43B29.28B
Stockholders Equity10.63B10.40B10.44B10.09B10.53B9.57B
Cash Flow
Free Cash Flow1.69B1.51B1.10B1.37B1.32B1.95B
Operating Cash Flow5.80B5.68B5.22B4.49B4.16B4.32B
Investing Cash Flow-4.38B-4.46B-20.20B-3.26B-6.13B-2.56B
Financing Cash Flow498.00M-1.13B2.48B11.36B203.00M227.00M

Rogers Communication Technical Analysis

Technical Analysis Sentiment
Positive
Last Price44.15
Price Trends
50DMA
37.19
Positive
100DMA
37.37
Positive
200DMA
41.77
Positive
Market Momentum
MACD
1.95
Negative
RSI
83.07
Negative
STOCH
90.94
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RCI.B, the sentiment is Positive. The current price of 44.15 is above the 20-day moving average (MA) of 39.83, above the 50-day MA of 37.19, and above the 200-day MA of 41.77, indicating a bullish trend. The MACD of 1.95 indicates Negative momentum. The RSI at 83.07 is Negative, neither overbought nor oversold. The STOCH value of 90.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:RCI.B.

Rogers Communication Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$23.78B13.2516.65%6.29%1.50%193.09%
61
Neutral
$40.70B-0.98-11.97%3.93%2.03%-69.70%
BCBCE
$21.45B84.812.83%5.45%
TUTU
$24.98B28.847.51%7.30%
80
Outperform
C$9.51B12.9137.46%3.29%-1.11%8.17%
$2.24B9.4110.84%5.01%
$6.96B12.6737.69%3.40%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:RCI.B
Rogers Communication
44.15
-3.18
-6.71%
BCE
BCE
23.91
-5.07
-17.49%
TU
Telus
16.55
2.31
16.22%
TSE:QBR.A
Quebecor Inc Cl A MV
42.52
13.74
47.74%
CGEAF
Cogeco Communications
53.20
17.59
49.40%
QBCRF
Quebecor
30.30
10.35
51.88%
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.Date of analysis: Jul 03, 2025