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Telecom Italia SpA ADR TIIAY

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Stock PINX Rating as of
$2.35 −0.02 (0.84%)
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As of Delayed Price Closed
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Company Report

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Telecom Italia Sells Its Fixed Network for EUR 18.8 Billion, Deleveraging Its Balance Sheet

Javier Correonero

Telecom Italia, or TIM, has over 30% market share in the mobile market and 45% share in broadband in Italy. Since the entrance of Iliad in the mobile market in 2018, TIM and Vodafone have seen their top lines decline substantially, pressured by customer losses and lower pricing. Iliad has gained more than 10 million customers since its entrance by offering more-for-less plans, forcing other operators to adjust their pricing. Pressure comes on top of an already competitive Italian mobile market, with low average revenue per user. TIM has already sold all its interest in Inwit, the italian tower company born from TIM's and Vodafone Italian assets.

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Price vs Fair Value

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TIIAY is trading at a 14% discount.
Price
$2.41
Fair Value
$1.80
Uncertainty
Very High
1-Star Price
$4.20
5-Star Price
$6.30
Economic Moat
Npxl
Capital Allocation
Phrq

Bulls Say, Bears Say

Bulls

The sale of its fixed network for EUR 18.8 billion will reduce TIM's leverage from 4 to 2 times net debt/EBITDA, giving the company room to breathe.

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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Trading Information

Previous Close Price
$2.37
Day Range
$2.31–2.35
52-Week Range
$2.21–3.45
Bid/Ask
$2.28 / $2.37
Market Cap
$4.99 Bil
Volume/Avg
47,833 / 45,629

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
0.29
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
0.14%

Company Profile

Telecom Italia is the incumbent telecommunications operator in Italy with more than 30% market share in the Italian mobile market and 45% market share in broadband. In the mobile market, it competes with Vodafone, Wind Tre and Iliad. In November 2023 TIM sold its fixed network to KKR for EUR 18.8 billion, and 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 its competitors Telefonica and America Movil.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Mid Value
Total Number of Employees
48,443
Website
https://www.telecomitalia.com

Competitors

Valuation

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Metric
TIIAY
VOD
SCMN
Price/Earnings (Normalized)
 —10.5115.44
Price/Book Value
 0.340.372.28
Price/Sales
 0.290.492.39
Price/Cash Flow
 1.221.506.31
Price/Earnings
TIIAY
VOD
SCMN

Financial Strength

Metric
TIIAY
VOD
SCMN
Quick Ratio
 0.680.860.62
Current Ratio
 0.700.890.86
Interest Coverage
 0.545.2216.74
Quick Ratio
TIIAY
VOD
SCMN

Profitability

Metric
TIIAY
VOD
SCMN
Return on Assets (Normalized)
 −1.21%2.36%7.07%
Return on Equity (Normalized)
 −5.11%6.07%15.50%
Return on Invested Capital (Normalized)
 0.71%4.33%14.01%
Return on Assets
TIIAY
VOD
SCMN
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