Spark New Zealand Ltd SPK

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NZD 4.23 +0.05 (1.20%)

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As of May 16, 2024 4:59am Delayed Price Closed

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Company Report

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Spark New Zealand: Experiencing Temporary IT Issues

Brian Han May 6, 2024

The downgrade in Spark New Zealand's fiscal 2024 EBITDA and investment income, or EBITDAI, guidance to between NZD 1.17 billion and NZD 1.21 billion isn't significant enough to lower our fair value estimate. At the midpoint of the range, it represents a decline of just 4%, with minimal drag from core mobile service (26% of group revenue at estimated gross margins of almost 70%).

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Price vs Fair Value

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SPK is trading at a 125% premium.

Price

NZD 4.18

May 15, 2024

Fair Value

NZD 3.10

Aug 18, 2023

Uncertainty

Medium

1-Star Price: NZD 8.66
5-Star Price: NZD 9.18
Economic Moat: Mkrph
Capital Allocation: Hvwkrlfl

Bulls Say, Bears Say

Bulls

Spark New Zealand is the largest telecom provider in New Zealand, where it provides the most diverse range of telecommunications services. These characteristics provide reasonable diversity and will allow the company to execute a product-bundling strategy.

Bears

Aggressive competition could place downward pressure on earnings and cash flow.

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News

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Spark New Zealand Cuts Fiscal Year 2024 Earnings Guidance

Global News Select May 5, 2024 9:11pm

Trading Information

Previous Close Price: NZD 4.18
Day Range: NZD 4.17–4.26
52-Week Range: NZD 4.17–5.37
Bid/Ask: NZD 4.23 / NZD 4.26
Market Cap: NZD 7.67 Bil
Volume/Avg: 3.6 Mil / 2.5 Mil

Key Statistics

Price/Earnings (Normalized): 19.47
Price/Sales: 2.34
Dividend Yield (Trailing): 6.38%
Dividend Yield (Forward): 6.38%
Total Yield: 8.29%

Company Profile

Spark is one of only three integrated telecommunications entities in New Zealand. It is the dominant provider of fixed-line services in the country and effectively equal-number-one player in the mobile telephony market. It also has a commanding presence in the New Zealand corporate and wholesale telecommunications services provision space. Spark's operations are split into mobile, voice, broadband, and digital-related services.

Sector: Communication Services
Industry: Telecom Services
Stock Style Box: Mid Core
Total Number of Employees: 5,569
Website: https://www.sparknz.co.nz

Competitors

Valuation

Metric	SPK	TPG	VOD
Price/Earnings (Normalized)	19.47	14.55	18.88
Price/Book Value	4.55	0.74	0.40
Price/Sales	2.34	1.55	0.66
Price/Cash Flow	10.52	7.13	1.68

Price/Earnings

SPK

TPG

VOD

Financial Strength

Metric	SPK	TPG	VOD
Quick Ratio	0.90	0.63	0.86
Current Ratio	1.00	0.75	0.89
Interest Coverage	5.08	1.17	5.22

Quick Ratio

SPK

TPG

VOD

Profitability

Metric	SPK	TPG	VOD
Return on Assets (Normalized)	0.13%	3.00%	1.87%
Return on Equity (Normalized)	0.31%	4.96%	4.81%
Return on Invested Capital (Normalized)	−0.02%	4.81%	3.75%

Return on Assets

SPK

TPG

VOD

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