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Telecom Italia SpA ADR TIIAY

Morningstar Rating
$2.61 −0.01 (0.53%)
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Company Report

Telecom Italia's Era as a Service Provider Begins This Summer; Maintaining EUR 0.25 Fair Value

Telecom Italia, or TIM, is the incumbent in the extremely competitive Italian telecommunications market. Since the entrance of Iliad in the mobile market in 2018, the Italian mobile market has become irrational, with extreme discounts that do not allow operators to earn their cost of capital. Iliad and mobile virtual operators own almost 30% of the mobile market, and players like TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Average revenue per user is one of the lowest in Europe, and once market stability is broken, prices never recover.

Price vs Fair Value

TIIAY is trading at a 349% premium.
Price
$2.61
Fair Value
$3.20
Uncertainty
Very High
1-Star Price
$1.30
5-Star Price
$6.50
Economic Moat
Cfxd
Capital Allocation
Xstv

Bulls Say, Bears Say

Bulls

The sale of its fixed network for EUR 18.8 billion could reduce TIM's leverage in the medium term, assuming the firm manages to grow by high single digits in the next three years.

Bears

The competitive environment in Italy is fierce, especially on the mobile side, where TIM has seen its customer base and prices decline for several years.

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News

Trading Information

Previous Close Price
$2.62
Day Range
$2.592.61
52-Week Range
$2.213.45
Bid/Ask
$2.53 / $2.66
Market Cap
$5.54 Bil
Volume/Avg
3,536 / 76,669

Key Statistics

Price/Earnings (Normalized)
Price/Sales
0.31
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Telecom Italia is the incumbent telecommunications operator in Italy with more than 30% share in the Italian mobile market and 40% share in broadband. In the mobile market, it competes with Vodafone, Wind Tre, and Iliad. After the sale of its fixed network to KKR for EUR 18.8 billion, TIM will become a pure service provider. TIM also has a 20% wireless market share in Brazil and has started building a broadband network in the country, although its reach is very small compared with competitors Telefonica and America Movil.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Mid Value
Total Number of Employees
47,168

Competitors

Valuation

Metric
TIIAY
00001
VOD
Price/Earnings (Normalized)
7.1418.57
Price/Book Value
0.390.290.38
Price/Sales
0.310.570.62
Price/Cash Flow
1.272.642.07
Price/Earnings
TIIAY
00001
VOD

Financial Strength

Metric
TIIAY
00001
VOD
Quick Ratio
0.600.990.57
Current Ratio
0.631.251.31
Interest Coverage
0.593.801.45
Quick Ratio
TIIAY
00001
VOD

Profitability

Metric
TIIAY
00001
VOD
Return on Assets (Normalized)
−0.45%3.97%1.37%
Return on Equity (Normalized)
−1.97%8.58%3.34%
Return on Invested Capital (Normalized)
2.34%5.60%3.53%
Return on Assets
TIIAY
00001
VOD
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