ASX:TPM

Stock Analysis Report

Executive Summary

TPG Telecom Limited provides telecommunication services to residential users, small and medium enterprises, government, large corporate enterprises, and wholesale customers in Australia and internationally.

Snowflake

Fundamentals

Imperfect balance sheet and overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

TPM

3.4%

AU Telecom

1.3%

AU Market


1 Year Return

-9.6%

TPM

8.9%

AU Telecom

9.9%

AU Market

Return vs Industry: TPM underperformed the Australian Telecom industry which returned 8.9% over the past year.

Return vs Market: TPM underperformed the Australian Market which returned 9.9% over the past year.


Share holder returns

TPMIndustryMarket
7 Day0.3%3.4%1.3%
30 Day-2.1%-1.4%-0.7%
90 Day6.3%-4.3%-0.4%
1 Year-9.1%-9.6%13.1%8.9%16.3%9.9%
3 Year-7.0%-10.6%-16.3%-28.7%35.8%17.6%
5 Year5.1%-0.7%-9.4%-30.1%51.9%17.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is TPG Telecom undervalued based on future cash flows and its price relative to the stock market?

37.1x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: TPM (A$6.95) is trading above our estimate of fair value (A$2.72)

Significantly Undervalued: TPM is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: TPM is poor value based on its PE Ratio (37.1x) compared to the Telecom industry average (32.4x).

PE vs Market: TPM is poor value based on its PE Ratio (37.1x) compared to the Australian market (17.9x).


Price Based on Expected Growth

Low PEG Ratio: TPM is poor value based on its PEG Ratio (8.6x)


Price Based on Value of Assets

PB vs Industry: TPM is good value based on its PB Ratio (2.2x) compared to the AU Telecom industry average (2.4x).


Next Steps

Future Growth

How is TPG Telecom expected to perform in the next 1 to 3 years based on estimates from 9 analysts?

4.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: TPM's forecast earnings growth (4.3% per year) is above the savings rate (2.3%).

Earnings vs Market: TPM's earnings (4.3% per year) are forecast to grow slower than the Australian market (10.2% per year).

High Growth Earnings: TPM's earnings are forecast to grow, but not significantly.

Revenue vs Market: TPM's revenue (3.5% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: TPM's revenue (3.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: TPM's Return on Equity is forecast to be low in 3 years time (6.6%).


Next Steps

Past Performance

How has TPG Telecom performed over the past 5 years?

6.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TPM's earnings have grown by 6.3% per year over the past 5 years.

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

Earnings vs Industry: TPM had negative earnings growth (-56.2%) over the past year, making it difficult to compare to the Telecom industry average (-40%).


Return on Equity

High ROE: TPM's Return on Equity (6.1%) is considered low.


Return on Assets

ROA vs Industry: TPM's Return on Assets is below or equal to the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: TPM's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is TPG Telecom's financial position?


Financial Position Analysis

Short Term Liabilities: TPM's short term assets (A$213.2M) do not cover its short term liabilities (A$895.6M)

Long Term Liabilities: TPM's short term assets (A$213.2M) do not cover its long term liabilities (A$1.5B)


Debt to Equity History and Analysis

Debt Level: TPM's debt to equity ratio (51%) is considered high

Reducing Debt: TPM's debt to equity ratio has increased from 41.6% to 51% over the past 5 years.

Debt Coverage: TPM's debt is well covered by operating cash flow (48.1%).

Interest Coverage: TPM's interest payments on its debt are well covered by EBIT (16x coverage).


Balance Sheet

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

Debt Coverage by Assets: TPM's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

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

0.86%

Expected Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%2.5%markettop25%5.6%industryaverage2.8%forecastin3Years0.9%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: TPM's dividend (0.58%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.5%).

High Dividend: TPM's dividend (0.58%) is low compared to the top 25% of dividend payers in the Australian market (5.6%).

Stable Dividend: TPM is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: TPM is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: TPM is not paying a notable dividend for .


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TPM's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of TPG Telecom's salary, the management and board of directors tenure and is there insider trading?

11.5yrs

Average board tenure


CEO

David Teoh (64yo)

0yrs

Tenure

AU$3,407,000

Compensation

Mr. David Teoh has been the Chief Executive Officer of TPG Telecom Limited (formerly, SP Telecommunications Ltd.) since April 7, 2008 and TPG Holdings Pty Ltd. since 1986. Mr. Teoh is the founder and Chie ...


CEO Compensation Analysis

Compensation vs. Market: David's total compensation ($USD2.32M) is about average for companies of similar size in the Australian market ($USD2.27M).

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


Board Age and Tenure

11.5yrs

Average Tenure

66yo

Average Age

Experienced Board: TPM's board of directors are seasoned and experienced ( 11.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • David Teoh (64yo)

    Executive Chairman & CEO

    • Tenure: 0yrs
    • Compensation: AU$3.41m
  • Stephen Banfield

    CFO & Company Secretary

    • Tenure: 0yrs
    • Compensation: AU$1.05m
  • Mandie De Ville

    Chief Information Officer

    • Tenure: 0yrs
    • Compensation: AU$654.00k
  • Craig Levy

    Chief Operating Officer

    • Tenure: 0yrs
    • Compensation: AU$1.15m
  • Wayne Springer

    General Manager of Corporate Products & Pricing

    • Tenure: 0yrs
  • Tony Moffatt

    General Counsel

    • Tenure: 0yrs
    • Compensation: AU$897.00k
  • Mark Rafferty

    Group Executive of Corporate

    • Tenure: 0yrs
    • Compensation: AU$1.02m
  • Nick Pachos

    Head of Product & Carrier Management

    • Tenure: 0yrs

Board Members

  • Rob Millner (68yo)

    Non-Executive Director

    • Tenure: 19.8yrs
    • Compensation: AU$99.00k
  • Denis Ledbury (69yo)

    Independent Non-Executive Director

    • Tenure: 19.8yrs
    • Compensation: AU$110.00k
  • David Teoh (64yo)

    Executive Chairman & CEO

    • Tenure: 0yrs
    • Compensation: AU$3.41m
  • Joseph Pang (66yo)

    Independent Non-Executive Director

    • Tenure: 11.5yrs
    • Compensation: AU$99.00k
  • Shane Teoh (33yo)

    Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: AU$93.00k

Company Information

TPG Telecom Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TPG Telecom Limited
  • Ticker: TPM
  • Exchange: ASX
  • Founded: 2000
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: AU$6.448b
  • Shares outstanding: 927.81m
  • Website: https://www.tpg.com.au

Number of Employees


Location

  • TPG Telecom Limited
  • 65 Waterloo Road
  • North Ryde
  • New South Wales
  • 2113
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TPMASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2001
YSTDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2001
TPMCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2001

Biography

TPG Telecom Limited provides telecommunication services to residential users, small and medium enterprises, government, large corporate enterprises, and wholesale customers in Australia and internationally ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/13 10:34
End of Day Share Price2019/10/11 00:00
Earnings2019/07/31
Annual Earnings2019/07/31


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.

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