Is REA Group Limited (ASX:REA) Potentially Undervalued?
Apr 03
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Australian (ASX) Telecom Sector Analysis
UpdatedApr 14, 2025
DataAggregated Company Financials
Companies46
- 7D3.3%
- 3M3.7%
- 1Y13.6%
- YTD3.5%
The Telecom industry is up 3.3% in the last week, with REA Group up 6.0%. During this same period, the Nine Entertainment Holdings underperformed, falling 7.8%. This takes the industry's 12 month performance to a gain of 14%. Looking forward, earnings are forecast to grow by 16% annually.
Sector Valuation and Performance
Has the Australian Telecom Sector valuation changed over the past few years?
| Date | Market Cap | Revenue | Earnings | PE | Absolute PE | PS |
|---|---|---|---|---|---|---|
| Mon, 14 Apr 2025 | AU$125.6b | AU$44.4b | AU$2.2b | 39.6x | 56x | 2.8x |
| Wed, 12 Mar 2025 | AU$123.6b | AU$44.4b | AU$2.2b | 33.1x | 55.3x | 2.8x |
| Fri, 07 Feb 2025 | AU$125.3b | AU$43.9b | AU$1.9b | 23.7x | 65.9x | 2.9x |
| Sun, 05 Jan 2025 | AU$122.5b | AU$44.0b | AU$1.9b | 24.8x | 64.8x | 2.8x |
| Tue, 03 Dec 2024 | AU$126.0b | AU$44.0b | AU$1.9b | 24.2x | 66.7x | 2.9x |
| Thu, 31 Oct 2024 | AU$119.7b | AU$44.0b | AU$1.9b | 23.1x | 63.3x | 2.7x |
| Sat, 28 Sep 2024 | AU$117.4b | AU$44.0b | AU$1.9b | 24.7x | 63.1x | 2.7x |
| Mon, 26 Aug 2024 | AU$118.5b | AU$43.9b | AU$2.1b | 23.6x | 57.3x | 2.7x |
| Wed, 24 Jul 2024 | AU$113.5b | AU$43.6b | AU$2.8b | 23x | 40x | 2.6x |
| Fri, 21 Jun 2024 | AU$109.9b | AU$43.6b | AU$2.8b | 23x | 38.6x | 2.5x |
| Sun, 19 May 2024 | AU$111.0b | AU$43.6b | AU$2.8b | 27.3x | 39x | 2.5x |
| Tue, 16 Apr 2024 | AU$109.9b | AU$43.6b | AU$2.9b | 29x | 38.1x | 2.5x |
| Thu, 14 Mar 2024 | AU$114.3b | AU$43.5b | AU$2.9b | 31.4x | 39.6x | 2.6x |
| Sat, 10 Feb 2024 | AU$117.1b | AU$43.0b | AU$3.2b | 21.8x | 36x | 2.7x |
| Mon, 08 Jan 2024 | AU$115.9b | AU$43.2b | AU$3.4b | 20.9x | 34.4x | 2.7x |
| Wed, 06 Dec 2023 | AU$109.2b | AU$43.2b | AU$3.4b | 20x | 32.4x | 2.5x |
| Fri, 03 Nov 2023 | AU$109.2b | AU$43.2b | AU$3.4b | 21.4x | 32.4x | 2.5x |
| Sun, 01 Oct 2023 | AU$110.7b | AU$43.2b | AU$3.4b | 19.9x | 32.8x | 2.6x |
| Tue, 29 Aug 2023 | AU$113.5b | AU$43.0b | AU$3.3b | 18.9x | 34.2x | 2.6x |
| Thu, 27 Jul 2023 | AU$115.9b | AU$42.4b | AU$3.3b | 20.8x | 35.3x | 2.7x |
| Sat, 24 Jun 2023 | AU$111.6b | AU$42.4b | AU$3.3b | 19.1x | 34x | 2.6x |
| Mon, 22 May 2023 | AU$115.0b | AU$42.4b | AU$3.3b | 21.2x | 35x | 2.7x |
| Wed, 19 Apr 2023 | AU$114.1b | AU$42.4b | AU$3.3b | 22.6x | 34.8x | 2.7x |
| Fri, 17 Mar 2023 | AU$107.5b | AU$42.4b | AU$3.3b | 21.7x | 32.8x | 2.5x |
| Sun, 12 Feb 2023 | AU$107.7b | AU$40.3b | AU$3.0b | 35.9x | 35.9x | 2.7x |
| Tue, 10 Jan 2023 | AU$103.1b | AU$40.3b | AU$3.0b | 32.7x | 34.2x | 2.6x |
| Thu, 08 Dec 2022 | AU$106.7b | AU$40.3b | AU$3.0b | 35.1x | 35.4x | 2.6x |
| Sat, 05 Nov 2022 | AU$104.7b | AU$40.3b | AU$3.0b | 32x | 34.7x | 2.6x |
| Mon, 03 Oct 2022 | AU$101.1b | AU$40.3b | AU$3.0b | 32.4x | 33.5x | 2.5x |
| Wed, 31 Aug 2022 | AU$108.1b | AU$40.0b | AU$3.0b | 30.8x | 35.9x | 2.7x |
| Fri, 29 Jul 2022 | AU$106.5b | AU$38.6b | AU$2.8b | 37x | 38x | 2.8x |
| Sun, 26 Jun 2022 | AU$103.6b | AU$38.6b | AU$2.8b | 39.7x | 36.9x | 2.7x |
| Tue, 24 May 2022 | AU$108.0b | AU$38.8b | AU$2.8b | 39.1x | 38.3x | 2.8x |
| Thu, 21 Apr 2022 | AU$115.7b | AU$38.8b | AU$2.8b | 42.8x | 40.9x | 3x |
Price to Earnings Ratio
40.9x
Current Industry PE
- Investors are optimistic on the Australian Communication Services industry, and appear confident in long term growth rates.
- The industry is trading at a PE ratio of 56.0x which is higher than its 3-year average PE of 41.5x.
- The industry is trading close to its 3-year average PS ratio of 2.7x.
Past Earnings Growth
- The earnings for companies in the Communication Services industry have declined 7.4% per year over the last three years.
- Meanwhile revenues for these companies have grown 4.6% per year.
- This means that although more sales are being generated, either the cost of doing business or the level of investment back into businesses has increased, which has decreased profits.
Industry Trends
Which industries have driven the changes within the Australian Telecom sector?
| AU Market | 0.085% | |
| Telecom | 3.30% | |
| Interactive Media and Services | 4.35% | |
| Entertainment | 3.80% | |
| Telecom Services and Carriers | 3.00% | |
| Wireless Telecom | 0% | 0 |
| Media | -4.79% | |
Industry PE
- Investors are most optimistic about the Entertainment industry which is trading above its 3-year average PE ratio of 136x.
- Analysts are expecting annual earnings growth of 33.7%, which is higher than its past year's earnings decline of 37.2% per year.
Forecasted Growth
- Analysts are most optimistic on the Entertainment industry, expecting annual earnings growth of 34% over the next 5 years.
- This is better than its past earnings decline of 37% per year.
- In contrast, the Interactive Media and Services industry is expected to see its earnings grow by 13% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?
| Company | Last Price | 7D | 1Y | Valuation | |
|---|---|---|---|---|---|
| REA REA Group | AU$240.11 | 8.2% +AU$2.4b | 35.0% | PE51.4x | |
| TLS Telstra Group | AU$4.43 | 2.8% +AU$1.3b | 19.4% | PE30.1x | |
| CAR CAR Group | AU$32.70 | 4.6% +AU$543.9m | -3.2% | PE48.2x | |
| TPG TPG Telecom | AU$4.99 | 5.9% +AU$519.1m | 16.0% | PS1.7x | |
| SEK SEEK | AU$20.91 | 7.1% +AU$491.8m | -15.6% | PE149x |
