ASX:TLS

Stock Analysis Report

Executive Summary

Telstra Corporation Limited provides telecommunications and information services to businesses, governments, and individuals in Australia and internationally.


Snowflake Analysis

Fair value with mediocre balance sheet.


Similar Companies

Share Price & News

How has Telstra's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TLS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.2%

TLS

-1.8%

AU Telecom

0.3%

AU Market


1 Year Return

-1.5%

TLS

-10.7%

AU Telecom

-22.9%

AU Market

Return vs Industry: TLS exceeded the Australian Telecom industry which returned -10.7% over the past year.

Return vs Market: TLS exceeded the Australian Market which returned -22.9% over the past year.


Shareholder returns

TLSIndustryMarket
7 Day5.2%-1.8%0.3%
30 Day-5.2%-12.7%-25.3%
90 Day-8.2%-15.5%-29.9%
1 Year2.9%-1.5%-7.5%-10.7%-19.4%-22.9%
3 Year-17.4%-30.9%-22.0%-32.9%-8.3%-20.8%
5 Year-30.9%-48.6%-34.9%-49.6%2.9%-20.3%

Price Volatility Vs. Market

How volatile is Telstra's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Telstra undervalued compared to its fair value and its price relative to the market?

27.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TLS (A$3.25) is trading below our estimate of fair value (A$4.45)

Significantly Below Fair Value: TLS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TLS is good value based on its PE Ratio (18.7x) compared to the Telecom industry average (25.6x).

PE vs Market: TLS is poor value based on its PE Ratio (18.7x) compared to the Australian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: TLS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: TLS is overvalued based on its PB Ratio (2.6x) compared to the AU Telecom industry average (1.8x).


Next Steps

Future Growth

How is Telstra forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

-1.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TLS's earnings are forecast to decline over the next 3 years (-1.9% per year).

Earnings vs Market: TLS's earnings are forecast to decline over the next 3 years (-1.9% per year).

High Growth Earnings: TLS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: TLS's revenue is expected to decline over the next 3 years (-0.4% per year).

High Growth Revenue: TLS's revenue is forecast to decline over the next 3 years (-0.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TLS's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has Telstra performed over the past 5 years?

-12.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TLS has a large one-off gain of A$526.0M impacting its December 31 2019 financial results.

Growing Profit Margin: TLS's current net profit margins (8.3%) are lower than last year (12.1%).


Past Earnings Growth Analysis

Earnings Trend: TLS's earnings have declined by -12.1% per year over the past 5 years.

Accelerating Growth: TLS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TLS had negative earnings growth (-33.8%) over the past year, making it difficult to compare to the Telecom industry average (-8.9%).


Return on Equity

High ROE: TLS's Return on Equity (13.5%) is considered low.


Next Steps

Financial Health

How is Telstra's financial position?


Financial Position Analysis

Short Term Liabilities: TLS's short term assets (A$7.5B) do not cover its short term liabilities (A$10.1B).

Long Term Liabilities: TLS's short term assets (A$7.5B) do not cover its long term liabilities (A$20.1B).


Debt to Equity History and Analysis

Debt Level: TLS's debt to equity ratio (110.8%) is considered high.

Reducing Debt: TLS's debt to equity ratio has reduced from 117.2% to 110.8% over the past 5 years.

Debt Coverage: TLS's debt is well covered by operating cash flow (38.7%).

Interest Coverage: TLS's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet

Inventory Level: TLS has a high level of physical assets or inventory.

Debt Coverage by Assets: TLS's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

What is Telstra's current dividend yield, its reliability and sustainability?

4.92%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TLS's dividend (4.92%) is higher than the bottom 25% of dividend payers in the Australian market (3.35%).

High Dividend: TLS's dividend (4.92%) is low compared to the top 25% of dividend payers in the Australian market (8.5%).


Stability and Growth of Payments

Stable Dividend: TLS's dividend payments have been volatile in the past 10 years.

Growing Dividend: TLS's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.7%), TLS's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TLS's dividends in 3 years are forecast to be covered by earnings (89.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure


CEO

Andy Penn (56yo)

4.83s

Tenure

AU$5,119,000

Compensation

Mr. Andrew Richard Penn, also known as Andy, MBA (Kingston), AMP (Harvard), BEc, FCCA, HFAIPM has been the Chief Executive Officer, Managing Director and Director of Telstra Corporation Limited since May 1 ...


CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD3.14M) is about average for companies of similar size in the Australian market ($USD4.14M).

Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Penn
CEO, MD & Director4.83yrsAU$5.12m0.015% A$5.3m
Vicki Brady
CFO and Group Executive of Strategy & Finance0.67yrAU$348.00k0.00030% A$108.4k
Alexandra Badenoch
Group Executive of Transformation3.58yrsAU$1.51m0.00090% A$325.1k
Christian von Reventlow
Group Executive of Product & Technology1.33yrsAU$1.60mno data
Brendon Riley
Group Executive & CEO of Telstra InfraCo1.42yrsAU$2.69m0.0070% A$2.5m
Håkan Eriksson
Chief Technology Officer3yrsno datano data
Ross Moffat
Head of Investor Relationsno datano datano data
Damien Coleman
Group General Counsel and Acting Group Executive of Legal & Corporate Affairsno datano datano data
Nicole McKechnie
Head of Communicationsno datano datano data
R. Howard
Managing Director of Voice & Convergence15yrsno datano data

3.0yrs

Average Tenure

Experienced Management: TLS's management team is considered experienced (3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Penn
CEO, MD & Director4.83yrsAU$5.12m0.015% A$5.3m
Peter Hearl
Non Executive Director5.58yrsAU$294.00k0.00084% A$303.4k
Craig Dunn
Non-Executive Director3.92yrsAU$284.00k0.00062% A$224.0k
Nora Scheinkestel
Non-Executive Director9.58yrsAU$304.00k0.0011% A$404.6k
Eelco Blok
Non-Executive Director1yrAU$88.00k0.00063% A$227.6k
John Mullen
Chairman of the Board3.92yrsAU$779.00k0.00085% A$307.1k
Roy Chestnutt
Non-Executive Director1.83yrsAU$260.00k0.00059% A$213.1k
Niek van Damme
Non-Executive Director1.42yrsAU$186.00k0.00062% A$224.0k
Elana Rubin
Non-Executive Directorno datano data0.00044% A$158.9k
Margaret Seale
Non-Executive Director7.83yrsAU$270.00k0.0026% A$942.9k

3.9yrs

Average Tenure

59yo

Average Age

Experienced Board: TLS's board of directors are considered experienced (3.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TLS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Telstra Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Telstra Corporation Limited
  • Ticker: TLS
  • Exchange: ASX
  • Founded: 1901
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: AU$36.125b
  • Shares outstanding: 11.88b
  • Website: https://www.telstra.com.au

Number of Employees


Location

  • Telstra Corporation Limited
  • 242 Exhibition Street
  • Level 41
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TTRA.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 1997
TLSASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 1997
TLSNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDNov 1997
TSTADB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 1997
TLSCHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 1997
TLSY.YOTCPK (Pink Sheets LLC)FINAL ADS EACH REPR 5 ORD SHS NPVUSUSDOct 1998
TSTDDB (Deutsche Boerse AG)FINAL ADS EACH REPR 5 ORD SHS NPVDEEUROct 1998

Biography

Telstra Corporation Limited provides telecommunications and information services to businesses, governments, and individuals in Australia and internationally. It operates in four segments: Telstra Consumer and Small Business, Telstra Enterprise, Networks and IT, and Telstra InfraCo. The company offers telecommunication products, services, and solutions across mobiles, fixed and mobile broadband, telephony and Pay TV/IPTV, and digital content; and online self-service capabilities, as well as operates inbound and outbound call centers, owned and licensed Telstra shops, and the Telstra dealership network. It also provides sales and contract management; and product management services for data and Internet protocol networks, mobility services, and network applications and services products, such as managed network, unified communications, cloud, industry solutions, and integrated services and monitoring. In addition, the company engages in the development of industry vertical solutions; planning, design, engineering architecture, and construction of Telstra networks, technology, and information technology solutions; and delivering network technologies. Further, it provides telecommunication products and services through its networks and related support systems to other carriers, carriage service providers, and Internet service providers; access to fixed network infrastructure assets; disconnection services; and network services under the Infrastructure Services Agreement and commercial contracts, as well as holds fixed network infrastructure, including data centers, non-mobiles related domestic fiber, copper, HFC cable, international subsea cables, exchanges, poles, ducts, and pipes. The company was formerly known as Australian and Overseas Telecommunications Corporation Limited and changed its name to Telstra Corporation Limited in April 1993. Telstra Corporation Limited was founded in 1901 and is based in Melbourne, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 10:34
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.