DB:TZL1

Stock Analysis Report

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Executive Summary

Telkom SA SOC Limited provides information and communications technology services to residential, business, government, wholesale, corporate, and mobile customers in South Africa and internationally.


Snowflake Analysis

Good value with moderate growth potential.

Share Price & News

How has Telkom SA SOC's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TZL1's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-4.7%

TZL1

0.6%

DE Telecom

1.5%

DE Market


1 Year Return

-72.1%

TZL1

2.4%

DE Telecom

6.4%

DE Market

Return vs Industry: TZL1 underperformed the German Telecom industry which returned 2.8% over the past year.

Return vs Market: TZL1 underperformed the German Market which returned 8% over the past year.


Shareholder returns

TZL1IndustryMarket
7 Day-4.7%0.6%1.5%
30 Day-22.8%-3.9%-0.6%
90 Day53.5%4.8%11.0%
1 Year-71.2%-72.1%6.5%2.4%8.7%6.4%
3 Year-59.6%-65.4%-2.6%-14.9%5.7%-2.7%
5 Year-58.3%-67.9%-2.0%-20.6%14.8%-0.7%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Telkom SA SOC undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TZL1 (€1.42) is trading below our estimate of fair value (€3.47)

Significantly Below Fair Value: TZL1 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TZL1 is poor value based on its PE Ratio (22.7x) compared to the XE Telecom industry average (17.5x).

PE vs Market: TZL1 is poor value based on its PE Ratio (22.7x) compared to the German market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: TZL1 is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: TZL1 is good value based on its PB Ratio (0.5x) compared to the DE Telecom industry average (1.3x).


Next Steps

Future Growth

How is Telkom SA SOC forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

37.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TZL1's forecast earnings growth (37% per year) is above the savings rate (0.2%).

Earnings vs Market: TZL1's earnings (37% per year) are forecast to grow faster than the German market (23.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TZL1's revenue (3.4% per year) is forecast to grow slower than the German market (5.8% per year).

High Growth Revenue: TZL1'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: TZL1's Return on Equity is forecast to be low in 3 years time (9.7%).


Next Steps

Past Performance

How has Telkom SA SOC performed over the past 5 years?

-8.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TZL1 has a large one-off loss of ZAR2.2B impacting its March 31 2020 financial results.

Growing Profit Margin: TZL1's current net profit margins (1.4%) are lower than last year (6.6%).


Past Earnings Growth Analysis

Earnings Trend: TZL1's earnings have declined by 8% per year over the past 5 years.

Accelerating Growth: TZL1's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TZL1 had negative earnings growth (-78.4%) over the past year, making it difficult to compare to the Telecom industry average (19.6%).


Return on Equity

High ROE: TZL1's Return on Equity (2.1%) is considered low.


Next Steps

Financial Health

How is Telkom SA SOC's financial position?


Financial Position Analysis

Short Term Liabilities: TZL1's short term assets (ZAR16.3B) do not cover its short term liabilities (ZAR17.1B).

Long Term Liabilities: TZL1's short term assets (ZAR16.3B) exceed its long term liabilities (ZAR14.8B).


Debt to Equity History and Analysis

Debt Level: TZL1's debt to equity ratio (42.2%) is considered high.

Reducing Debt: TZL1's debt to equity ratio has increased from 16.7% to 42.2% over the past 5 years.

Debt Coverage: TZL1's debt is well covered by operating cash flow (82.6%).

Interest Coverage: TZL1's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet


Next Steps

Dividend

What is Telkom SA SOC current dividend yield, its reliability and sustainability?

4.42%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TZL1's dividend (4.42%) is higher than the bottom 25% of dividend payers in the German market (1.24%).

High Dividend: TZL1's dividend (4.42%) is in the top 25% of dividend payers in the German market (3.81%)


Stability and Growth of Payments

Stable Dividend: TZL1's dividend payments have been volatile in the past 10 years.

Growing Dividend: TZL1's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (100.4%), TZL1's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TZL1's dividends in 3 years are forecast to be thoroughly covered by earnings (5.1% payout ratio).


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Sipho Maseko (51 yo)

7.33yrs

Tenure

R24,108,430

Compensation

Mr. Sipho Nkosinathi Maseko, BA, LLB., has been Group Chief Executive Officer and Executive Director of Telkom SA SOC Limited since April 1, 2013. Mr. Maseko is a Director of BMW, Gyro Group and BCX. He se ...


CEO Compensation Analysis

Compensation vs Market: Sipho's total compensation ($USD1.37M) is about average for companies of similar size in the German market ($USD1.29M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Sipho Maseko
Group CEO & Executive Director7.33yrsR24.11mno data
Tsholofelo B. Molefe
Group CFO & Executive Director2.08yrsR8.18m0.0019%
ZAR 12.9k
Althon Beukes
Group Chief Information Officer1.67yrsR5.23mno data
Melody Lekota
Chief Human Resources Officer3.42yrsR6.41mno data
Serame Taukobong
Chief Executive Officer of Consumer & Small Business2.17yrsR10.13mno data
Lunga Siyo
Chief Executive Officer of SMB (Small & Medium Business)0.58yrR5.03mno data
Alphonzo Samuels
Chief Executive Officer of Openserve4.83yrsR10.12mno data
P. Bogoshi
Chief Executive Officer of BCX Group2.17yrsR7.96mno data
Lesiba Maloba
Chief Executive Officer of Gyro Group2.75yrsR5.63mno data
Babalwa George
Group Executive of Investor Relationsno datano datano data
Anton Klopper
Group Executive of Legal Servicesno datano datano data
John Myers
Fastnet Chief Executive Officerno datano datano data

2.2yrs

Average Tenure

50.5yo

Average Age

Experienced Management: TZL1's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Sipho Maseko
Group CEO & Executive Director7.33yrsR24.11mno data
Tsholofelo B. Molefe
Group CFO & Executive Director2.08yrsR8.18m0.0019%
ZAR 12.9k
Susan Botha
Independent Non-Executive Director7.67yrsR666.90kno data
Louis von Zeuner
Independent Non-Executive Director7.67yrsR914.73kno data
Sibusiso Sibisi
Independent Non-Executive Director1.33yrsR243.71kno data
P.C. Luthuli
Independent Non-Executive Director2.25yrsR513.71kno data
Keith Rayner
Independent Non-Executive Director1.08yrsno datano data
Kholeka Mzondeki
Independent Non-Executive Director7.75yrsR762.23k0.00015%
ZAR 989.0
Navin Kapila
Independent Non-Executive Director9.5yrsR867.90kno data
Khanyisile Kweyama
Independent Non-Executive Director7.67yrsR626.00kno data
Fagmeedah Petersen-Cook
Independent Non-Executive Director7.67yrsR816.28kno data
M. Moloko
Independent Chairman of the Board1.17yrsno datano data

7.5yrs

Average Tenure

55yo

Average Age

Experienced Board: TZL1's board of directors are considered experienced (7.5 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

Telkom SA SOC Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Telkom SA SOC Limited
  • Ticker: TZL1
  • Exchange: DB
  • Founded: 1991
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: R13.710b
  • Listing Market Cap: R659.327m
  • Shares outstanding: 498.73m
  • Website: https://www.telkom.co.za

Number of Employees


Location

  • Telkom SA SOC Limited
  • 61 Oak Avenue
  • Highveld Park
  • Centurion
  • Gauteng
  • 157
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TLKG.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMar 2003
TKGJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARMar 2003
TZL1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2003

Biography

Telkom SA SOC Limited provides information and communications technology services to residential, business, government, wholesale, corporate, and mobile customers in South Africa and internationally. The c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/06 22:05
End of Day Share Price2020/08/06 00:00
Earnings2020/03/31
Annual Earnings2020/03/31


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.