Safaricom Valuation

Is SCOM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • PM vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of SCOM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SCOM (KES13.5) is trading below our estimate of fair value (KES17.78)

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


Key Valuation Metric

Which metric is best to use when looking at relative valuation for SCOM?

Other financial metrics that can be useful for relative valuation.

SCOM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.5x
Enterprise Value/EBITDA5.6x
PEG Ratio1.9x

Price to Earnings Ratio vs Peers

How does SCOM's PE Ratio compare to its peers?

The above table shows the PE ratio for SCOM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average10.5x
7030 Mobile Telecommunications Company Saudi Arabia
10.4x-19.9%ر.س12.7b
GP Grameenphone
12.5xn/a৳387.0b
1U1 1&1
9.5x1.1%€3.1b
GLO Globe Telecom
9.7x-7.6%₱253.8b
SCOM Safaricom
8.6x4.5%KSh540.9b

Price-To-Earnings vs Peers: SCOM is good value based on its Price-To-Earnings Ratio (8.6x) compared to the peer average (10.5x).


Price to Earnings Ratio vs Industry

How does SCOM's PE Ratio compare vs other companies in the Global Wireless Telecom Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a14.0%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a14.0%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: SCOM is good value based on its Price-To-Earnings Ratio (8.6x) compared to the Global Wireless Telecom industry average (17.2x).


Price to Earnings Ratio vs Fair Ratio

What is SCOM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SCOM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8.6x
Fair PE Ration/a

PM vs Fair Ratio: Insufficient data to calculate SCOM's Price-To-Earnings Fair Ratio for valuation analysis.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst SCOM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentKSh13.50
KSh21.49
+59.2%
10.7%KSh24.30KSh17.00n/a9
Feb ’25KSh13.50
KSh21.49
+59.2%
10.7%KSh24.30KSh17.00n/a9
Jan ’25KSh13.90
KSh21.87
+57.3%
11.6%KSh25.77KSh17.00n/a10
Dec ’24KSh14.05
KSh23.29
+65.8%
23.9%KSh39.08KSh17.00n/a11
Nov ’24KSh12.30
KSh24.06
+95.6%
26.0%KSh39.08KSh19.00n/a8
Oct ’24KSh14.60
KSh23.89
+63.6%
26.2%KSh39.08KSh17.00n/a8
Sep ’24KSh15.10
KSh24.66
+63.3%
26.0%KSh39.08KSh17.00n/a7
Aug ’24KSh17.35
KSh26.02
+50.0%
27.9%KSh39.08KSh17.00n/a8
Jul ’24KSh17.50
KSh26.02
+48.7%
27.9%KSh39.08KSh17.00n/a8
Jun ’24KSh16.60
KSh26.33
+58.6%
26.3%KSh39.08KSh19.50n/a8
May ’24KSh16.50
KSh27.06
+64.0%
20.6%KSh36.50KSh19.50n/a5
Apr ’24KSh18.10
KSh28.06
+55.0%
15.9%KSh36.50KSh24.30n/a5
Mar ’24KSh23.35
KSh31.58
+35.2%
20.7%KSh43.60KSh24.50n/a6
Feb ’24KSh24.00
KSh31.58
+31.6%
20.7%KSh43.60KSh24.50KSh13.506
Jan ’24KSh24.15
KSh34.57
+43.2%
15.7%KSh43.60KSh27.00KSh13.905
Dec ’23KSh24.50
KSh34.98
+42.8%
12.6%KSh43.60KSh27.00KSh14.058
Nov ’23KSh25.00
KSh34.29
+37.2%
16.9%KSh43.60KSh21.50KSh12.308
Oct ’23KSh24.95
KSh35.59
+42.7%
18.5%KSh46.00KSh21.50KSh14.609
Sep ’23KSh27.85
KSh35.59
+27.8%
18.5%KSh46.00KSh21.50KSh15.109
Aug ’23KSh29.15
KSh35.75
+22.7%
17.5%KSh46.00KSh21.50KSh17.3510
Jul ’23KSh25.05
KSh36.85
+47.1%
17.9%KSh46.00KSh21.50KSh17.5010
Jun ’23KSh26.00
KSh37.67
+44.9%
16.8%KSh46.00KSh23.00KSh16.6011
May ’23KSh33.70
KSh39.66
+17.7%
11.2%KSh46.00KSh31.00KSh16.5010
Apr ’23KSh34.50
KSh39.73
+15.2%
11.7%KSh46.00KSh31.00KSh18.109
Mar ’23KSh36.15
KSh38.95
+7.7%
11.2%KSh44.34KSh31.00KSh23.358
Feb ’23KSh37.50
KSh39.17
+4.4%
11.5%KSh44.34KSh31.00KSh24.008

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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