ASX:TPM

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Proven track record with imperfect balance sheet.


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

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


Market Performance


7 Day Return

4.0%

TPM

0.4%

AU Telecom

4.9%

AU Market


1 Year Return

3.5%

TPM

-4.2%

AU Telecom

-14.2%

AU Market

Return vs Industry: TPM exceeded the Australian Telecom industry which returned -4.2% over the past year.

Return vs Market: TPM exceeded the Australian Market which returned -14.2% over the past year.


Shareholder returns

TPMIndustryMarket
7 Day4.0%0.4%4.9%
30 Day-7.9%-9.6%-8.9%
90 Day4.6%-15.1%-22.7%
1 Year4.6%3.5%-0.6%-4.2%-10.3%-14.2%
3 Year13.7%9.6%-7.3%-20.4%2.6%-11.6%
5 Year-17.5%-22.2%-30.4%-46.1%13.9%-11.8%

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 compared to its fair value and its price relative to the market?

25.04x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TPM (A$7.3) is trading above our estimate of fair value (A$4.03)

Significantly Below Fair Value: TPM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TPM is good value based on its PE Ratio (25x) compared to the Telecom industry average (26.8x).

PE vs Market: TPM is poor value based on its PE Ratio (25x) compared to the Australian market (13.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: TPM is overvalued based on its PB Ratio (2.3x) compared to the AU Telecom industry average (2x).


Next Steps

Future Growth

How is TPG Telecom forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

-7.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TPM's earnings are forecast to decline over the next 3 years (-7.6% per year).

Earnings vs Market: TPM's earnings are forecast to decline over the next 3 years (-7.6% per year).

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

Revenue vs Market: TPM's revenue (3.4% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: TPM's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TPM's Return on Equity is forecast to be low in 3 years time (7.3%).


Next Steps

Past Performance

How has TPG Telecom performed over the past 5 years?

-0.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TPM has high quality earnings.

Growing Profit Margin: TPM's current net profit margins (10.9%) are higher than last year (9.9%).


Past Earnings Growth Analysis

Earnings Trend: TPM's earnings have declined by -0.7% per year over the past 5 years.

Accelerating Growth: TPM's earnings growth over the past year (10.5%) exceeds its 5-year average (-0.7% per year).

Earnings vs Industry: TPM earnings growth over the past year (10.5%) exceeded the Telecom industry -6.1%.


Return on Equity

High ROE: TPM's Return on Equity (9.1%) is considered low.


Next Steps

Financial Health

How is TPG Telecom's financial position?


Financial Position Analysis

Short Term Liabilities: TPM's short term assets (A$242.4M) do not cover its short term liabilities (A$560.2M).

Long Term Liabilities: TPM's short term assets (A$242.4M) do not cover its long term liabilities (A$1.9B).


Debt to Equity History and Analysis

Debt Level: TPM's debt to equity ratio (59.5%) is considered high.

Reducing Debt: TPM's debt to equity ratio has increased from 32.7% to 59.5% over the past 5 years.

Debt Coverage: TPM's debt is well covered by operating cash flow (39.9%).

Interest Coverage: TPM's interest payments on its debt are well covered by EBIT (8.9x coverage).


Balance Sheet


Next Steps

Dividend

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

0.82%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TPM's dividend (0.82%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.9%).

High Dividend: TPM's dividend (0.82%) is low compared to the top 25% of dividend payers in the Australian market (7.56%).


Stability and Growth of Payments

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 the Australian market.


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

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

12.0yrs

Average board tenure


CEO

David Teoh (64yo)

no data

Tenure

AU$3,091,000

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 ($USD1.95M) is about average for companies of similar size in the Australian market ($USD2.61M).

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


Board Members

NamePositionTenureCompensationOwnership
David Teoh
Executive Chairman & CEOno dataAU$3.09m34.31% A$2.3b
Robert Millner
Non-Executive Director20.25yrsAU$99.00k0.75% A$50.5m
Denis Ledbury
Independent Non-Executive Director20.25yrsAU$110.00k0.0092% A$621.1k
Joseph Pang
Independent Non-Executive Director12yrsAU$99.00k0.011% A$753.8k
Shane Teoh
Non-Executive Director8.25yrsAU$93.00k0.014% A$972.6k

12.0yrs

Average Tenure

66yo

Average Age

Experienced Board: TPM's board of directors are seasoned and experienced ( 12 years average tenure).


Ownership

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


Insider Trading Volume

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


Ownership Breakdown

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


Top Shareholders

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$6.773b
  • Shares outstanding: 927.81m
  • Website: https://www.tpg.com.au

Number of Employees


Location

  • TPG Telecom Limited
  • 65 Waterloo Road
  • Macquarie Park
  • 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
TPPT.YOTCPK (Pink Sheets LLC)ADRUSUSDJul 2015

Biography

TPG Telecom Limited provides telecommunication services to residential users, small businesses, corporate, government, and wholesale customers in Australia and internationally. The company offers ADSL2+, NBN, and fibre to the building plans; SIM only mobile plans; and phone plans. It also provides various bundle plans; Internet products; and POP3 and Internet message access protocol email accounts. In addition, it offers dark fiber, point-to-point Ethernet, Ethernet multipoint connectivity, and Internet protocol virtual private network, and wavelength services; SIP and inbound voice, ISDN PRI and PSTN, and BizPhone services; and private cloud, national AWS connect, and co-location services. The company was formerly known as SP Telemedia Limited and changed its name to TPG Telecom Limited in December 2009. TPG Telecom Limited was incorporated in 2000 and is based in Macquarie Park, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 13:24
End of Day Share Price2020/04/09 00:00
Earnings2020/01/31
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.