Bezeq The Israel Telecommunication (TASE:BEZQ) - Share price, News & Analysis

BEZQ fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	4/6
Financial Health	3/6
Dividends	2/6

BEZQ Stock Overview

Bezeq The Israel Telecommunication Corporation Limited provides communications services to business and private customers in Israel.

Rewards

Trading at 71% below our estimate of its fair value

Earnings are forecast to grow 5.96% per year

Earnings grew by 48.6% over the past year

Risk Analysis

Has a high level of debt

Bezeq The Israel Telecommunication Competitors

Partner Communications

NasdaqGS:PTNR

US$1.3b

Cellcom Israel

TASE:CEL

₪2.8b

Price History & Performance

Summary of all time highs, changes and price drops for Bezeq The Israel Telecommunication
Historical stock prices
Current Share Price	₪4.75
52 Week High	₪5.75
52 Week Low	₪3.32
Beta	0.096
1 Month Change	-11.41%
3 Month Change	-12.51%
1 Year Change	40.56%
3 Year Change	92.74%
5 Year Change	-23.37%
Change since IPO	166.41%

Recent News & Updates

Apr 28

Bezeq The Israel Telecommunication (TLV:BEZQ) Has Some Way To Go To Become A Multi-Bagger

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Amongst other things...

Shareholder Returns

	BEZQ	IL Telecom	IL Market
7D	-2.9%	-3.2%	-0.7%
1Y	40.6%	42.0%	10.9%

Return vs Industry: BEZQ underperformed the IL Telecom industry which returned 42% over the past year.

Return vs Market: BEZQ exceeded the IL Market which returned 10.9% over the past year.

Price Volatility

Is BEZQ's price volatile compared to industry and market?
BEZQ volatility
BEZQ Average Weekly Movement	3.2%
Telecom Industry Average Movement	4.9%
Market Average Movement	5.4%
10% most volatile stocks in IL Market	9.1%
10% least volatile stocks in IL Market	3.7%

Stable Share Price: BEZQ is less volatile than 75% of IL stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: BEZQ's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1980	5,475	Dudu Mizrahi	https://www.bezeq.co.il

Bezeq The Israel Telecommunication Corporation Limited provides communications services to business and private customers in Israel. It operates in four segments: Stationary Domestic Communication; Cellular Communication; Internet services, International Communications, and NASR and ICT Solutions; and Multi-channel TV. The company offers telephony services, including basic telephony services on the domestic telephone line, as well as related services, such as voice mail and caller ID; national numbering services; broadband Internet access infrastructure services; and transmission and data-communication services.

Bezeq The Israel Telecommunication Fundamentals Summary

How do Bezeq The Israel Telecommunication's earnings and revenue compare to its market cap?
BEZQ fundamental statistics
Market Cap	₪13.14b
Earnings (TTM)	₪1.18b
Revenue (TTM)	₪8.82b

11.1x

P/E Ratio

1.5x

P/S Ratio

Is BEZQ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
BEZQ income statement (TTM)
Revenue	₪8.82b
Cost of Revenue	₪1.89b
Gross Profit	₪6.93b
Other Expenses	₪5.75b
Earnings	₪1.18b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

May 24, 2022

Earnings per share (EPS)	0.43
Gross Margin	78.59%
Net Profit Margin	13.41%
Debt/Equity Ratio	735.6%

How did BEZQ perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

21%

Payout Ratio

Valuation

Is Bezeq The Israel Telecommunication undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: BEZQ (₪4.75) is trading below our estimate of fair value (₪16.38)

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

Price To Earnings Ratio

PE vs Industry: BEZQ is good value based on its PE Ratio (11.1x) compared to the Asian Telecom industry average (17.6x).

PE vs Market: BEZQ is good value based on its PE Ratio (11.1x) compared to the IL market (11.5x).

Price to Earnings Growth Ratio

PEG Ratio: BEZQ is poor value based on its PEG Ratio (1.9x)

Price to Book Ratio

PB vs Industry: BEZQ is overvalued based on its PB Ratio (12x) compared to the IL Telecom industry average (1.3x).

Future Growth

How is Bezeq The Israel Telecommunication forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: BEZQ's forecast earnings growth (6% per year) is above the savings rate (1.5%).

Earnings vs Market: BEZQ's earnings (6% per year) are forecast to grow faster than the IL market (2.8% per year).

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

Revenue vs Market: BEZQ's revenue (0.5% per year) is forecast to grow slower than the IL market (3.9% per year).

High Growth Revenue: BEZQ's revenue (0.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: BEZQ's Return on Equity is forecast to be very high in 3 years time (64.9%).

Past Performance

How has Bezeq The Israel Telecommunication performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-9.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BEZQ has high quality earnings.

Growing Profit Margin: BEZQ's current net profit margins (13.4%) are higher than last year (9.1%).

Past Earnings Growth Analysis

Earnings Trend: BEZQ's earnings have declined by 9.5% per year over the past 5 years.

Accelerating Growth: BEZQ's earnings growth over the past year (48.6%) exceeds its 5-year average (-9.5% per year).

Earnings vs Industry: BEZQ earnings growth over the past year (48.6%) exceeded the Telecom industry 18.3%.

Return on Equity

High ROE: Whilst BEZQ's Return on Equity (107.94%) is outstanding, this metric is skewed due to their high level of debt.

Financial Health

How is Bezeq The Israel Telecommunication's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: BEZQ's short term assets (₪4.1B) exceed its short term liabilities (₪3.8B).

Long Term Liabilities: BEZQ's short term assets (₪4.1B) do not cover its long term liabilities (₪9.1B).

Debt to Equity History and Analysis

Debt Level: BEZQ's net debt to equity ratio (559.8%) is considered high.

Reducing Debt: BEZQ's debt to equity ratio has increased from 496.2% to 735.6% over the past 5 years.

Debt Coverage: BEZQ's debt is well covered by operating cash flow (35.2%).

Interest Coverage: BEZQ's interest payments on its debt are well covered by EBIT (7.5x coverage).

Balance Sheet

Dividend

What is Bezeq The Israel Telecommunication current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.83%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: BEZQ's dividend (1.83%) isn’t notable compared to the bottom 25% of dividend payers in the IL market (2%).

High Dividend: BEZQ's dividend (1.83%) is low compared to the top 25% of dividend payers in the IL market (5.98%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (21%), BEZQ's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (20.9%), BEZQ's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

4.9yrs

Average management tenure

CEO

Dudu Mizrahi (51 yo)

3.67yrs

Tenure

₪5,209,000

Compensation

Mr. David Mizrahi, also known as Dudu, has been Chief Executive Officer of Bezeq - The Israel Telecommunications Corp. (Bezeq) since September 1, 2018. Mr. Mizrahi serves as Deputy Chief Executive Officer...

CEO Compensation Analysis

Compensation vs Market: Dudu's total compensation ($USD1.55M) is about average for companies of similar size in the IL market ($USD1.41M).

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

Leadership Team

Experienced Management: BEZQ's management team is considered experienced (4.9 years average tenure).

Board Members

Experienced Board: BEZQ's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.

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.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/19 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31