DB:TS6

Stock Analysis Report

Executive Summary

Teleste Corporation provides video and broadband solutions, and network services in Finland and internationally.

Rewards

Trading at 39.3% below its fair value

Earnings are forecast to grow 109.44% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 3.68% is not well covered by earnings



Snowflake Analysis

Average dividend payer and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: TS6 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

TS6

-3.9%

DE Communications

-2.4%

DE Market


1 Year Return

-17.6%

TS6

4.9%

DE Communications

11.8%

DE Market

Return vs Industry: TS6 underperformed the German Communications industry which returned 26.4% over the past year.

Return vs Market: TS6 underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

TS6IndustryMarket
7 Day-1.1%-3.9%-2.4%
30 Day4.5%-3.2%-1.1%
90 Day-6.1%6.2%3.0%
1 Year-14.7%-17.6%5.4%4.9%15.3%11.8%
3 Year-34.3%-39.3%8.8%8.4%14.4%4.4%
5 Year-1.9%-14.3%103.3%102.8%23.8%7.0%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

37.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TS6 (€5.42) is trading below our estimate of fair value (€8.93)

Significantly Below Fair Value: TS6 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TS6 is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: TS6 is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TS6's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: TS6 is good value based on its PB Ratio (1.4x) compared to the DE Communications industry average (3.1x).


Next Steps

Future Growth

How is Teleste forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

109.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TS6 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: TS6 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: TS6's is expected to become profitable in the next 3 years.

Revenue vs Market: TS6's revenue (3.9% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: TS6's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TS6's Return on Equity is forecast to be low in 3 years time (16.3%).


Next Steps

Past Performance

How has Teleste performed over the past 5 years?

-37.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TS6 is currently unprofitable.

Growing Profit Margin: TS6 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: TS6 is unprofitable, and losses have increased over the past 5 years at a rate of -37.3% per year.

Accelerating Growth: Unable to compare TS6's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TS6 is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (49.1%).


Return on Equity

High ROE: TS6 has a negative Return on Equity (-0.99%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Teleste's financial position?


Financial Position Analysis

Short Term Liabilities: TS6's short term assets (€95.3M) exceed its short term liabilities (€56.9M).

Long Term Liabilities: TS6's short term assets (€95.3M) exceed its long term liabilities (€28.4M).


Debt to Equity History and Analysis

Debt Level: TS6's debt to equity ratio (48.2%) is considered high.

Reducing Debt: TS6's debt to equity ratio has increased from 36.4% to 48.2% over the past 5 years.

Debt Coverage: TS6's debt is not well covered by operating cash flow (2.5%).

Interest Coverage: TS6 is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: TS6 has a high level of physical assets or inventory.

Debt Coverage by Assets: TS6's debt is covered by short term assets (assets are 2.8x debt).


Next Steps

Dividend

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

3.58%

Current Dividend Yield


Dividend Yield vs Market

company3.6%marketbottom25%1.4%markettop25%3.6%industryaverage3.5%forecastin3Years4.3%

Current dividend yield vs market & industry

Notable Dividend: TS6's dividend (3.68%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: TS6's dividend (3.58%) is in the top 25% of dividend payers in the German market (3.57%)


Stability and Growth of Payments

Stable Dividend: TS6's dividend payments have been volatile in the past 10 years.

Growing Dividend: TS6's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: TS6 is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: TS6's dividends in 3 years are forecast to be well covered by earnings (37.5% payout ratio).


Next Steps

Management

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

7.2yrs

Average management tenure


CEO

Jukka Rinnevaara (58yo)

17.2yrs

Tenure

0

Mr. Jukka Rinnevaara, M.Sc. (Econ.) serves as Independent Director of Vaisala Oyj since March 26, 2019. He has been the Chief Executive Officer and President of Teleste Corporation since November 01, 2002  ...


CEO Compensation Analysis

Compensation vs Market: Jukka's total compensation ($USD0.00) is below average for companies of similar size in the German market ($USD425.50K).

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


Management Age and Tenure

7.2yrs

Average Tenure

52yo

Average Age

Experienced Management: TS6's management team is seasoned and experienced (7.2 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

58yo

Average Age

Experienced Board: TS6's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


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

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


Management Team

  • Johan Slotte (60yo)

    Deputy CEO and Head of Corporate Business Development & Legal Affairs

    • Jukka Rinnevaara (58yo)

      President & CEO

      • Tenure: 17.2yrs
    • Hanno Narjus (57yo)

      Senior Vice President of Network Products

      • Markus Mattila (51yo)

        Senior Vice President of Operations

        • Tenure: 11.9yrs
      • Esa Harju (52yo)

        Senior Vice President of Video Security & Information Business Unit

        • Tenure: 3.1yrs
      • Pasi Järvenpää (52yo)

        Senior Vice President of Research & Development

        • Juha Hyytiäinen (52yo)

          Chief Financial Officer

          • Tenure: 6yrs
        • Mika Kavanti

          Vice President of Marketing and Channel Sales

          • Tenure: 8.4yrs
        • Tuomas Vanne (40yo)

          Senior Vice President of People and Competence

          • Tenure: 1yrs

        Board Members

        • Pertti Ervi (62yo)

          Independent Chairman of the Board

          • Tenure: 2.3yrs
        • Kai Telanne (55yo)

          Independent Director

          • Tenure: 11.8yrs
        • Heikki Mäkijärvi (60yo)

          Independent Director

          • Tenure: 1.8yrs
        • Timo Luukkainen (65yo)

          Non-Independent Director

          • Tenure: 3.8yrs
        • Jannica Fagerholm (58yo)

          Independent Director

          • Tenure: 6.8yrs
        • Jussi Himanen (47yo)

          Director

          • Tenure: 0.8yrs
        • Vesa Korpimies (57yo)

          Director

          • Tenure: 0.8yrs

        Company Information

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


        Key Information

        • Name: Teleste Corporation
        • Ticker: TS6
        • Exchange: DB
        • Founded: 1954
        • Industry: Communications Equipment
        • Sector: Tech
        • Market Cap: €102.210m
        • Shares outstanding: 18.19m
        • Website: https://www.teleste.com

        Number of Employees


        Location

        • Teleste Corporation
        • Telestenkatu 1
        • Littoinen
        • Kaarina
        • Finland Proper
        • 20660
        • Finland

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        TLT1VHLSE (OMX Nordic Exchange Helsinki)YesOrdinary SharesFIEURMar 1999
        TS6DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 1999
        0K1QLSE (London Stock Exchange)YesOrdinary SharesGBEURMar 1999

        Biography

        Teleste Corporation provides video and broadband solutions, and network services in Finland and internationally. The company’s Video and Broadband Solutions segment focuses on product solutions for broadband access networks, video service platforms, and video surveillance applications. Its Network Services segment offers network service solutions, including new construction, rebuilding, upgrading, planning, and maintenance services for cable networks. The company’s broadband data and video products include RF amplifiers, optical nodes, remote PHY nodes, RF passives, optical passives, management tools, DOCSIS mini-CMTS, headend optics, Luminato video headend products, and Optimo transcoders, as well as modular IP to analog TV and IP to FM radio converters. Its information and security products consist of passenger information management products, media content management products, fleet monitoring and operation control products, information displays, display control products, onboard passenger information systems, onboard infotainment and advertising products, onboard public address and intercommunications products, onboard video surveillance products, onboard connectivity products, video management systems, mobile network video recorders, fiber optic video transmission products, video encoders and decoders, secured IP link products, and S-AWARE situational awareness systems. In addition, it provides information and security services, such as technical integration, software support and maintenance, system design, software integration and tailor made solutions, project management, configuration, installation and commissioning, and training; and broadband data and video services. It serves the hospitality, public transport, public authorities, airports, road, and military and border control markets, as well as installers, operators, and wholesalers and distributors. The company was founded in 1954 and is headquartered in Kaarina, Finland. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/27 20:55
        End of Day Share Price2020/01/27 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        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.