Digi Communications (BVB:DIGI) - Share price, News & Analysis

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

DIGI (RON37.5) is trading above our estimate of [[fair value]] (RON14.91)

DIGI fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	0/6
Financial Health	3/6
Dividends	0/6

DIGI Stock Overview

Digi Communications N.V. provides telecommunication services in Romania, Spain, and Italy.

Rewards

Earnings are forecast to grow 80.59% per year

Risk Analysis

Has a high level of debt

Digi Communications Competitors

Magyar Telekom Távközlési Nyilvánosan Müködö Részvénytársaság

BUSE:MTELEKOM

Ft309.0b

IDT

NYSE:IDT

US$700.1m

Inti Bangun Sejahtera

IDX:IBST

Rp11.6t

Jasmine International

SET:JAS

฿22.3b

Price History & Performance

Summary of all time highs, changes and price drops for Digi Communications
Historical stock prices
Current Share Price	RON37.50
52 Week High	RON47.20
52 Week Low	RON34.50
Beta	0.37
1 Month Change	-0.53%
3 Month Change	-6.72%
1 Year Change	1.35%
3 Year Change	25.00%
5 Year Change	-6.48%
Change since IPO	-8.98%

Shareholder Returns

	DIGI	RO Telecom	RO Market
7D	-2.3%	-0.2%	0.4%
1Y	1.4%	-8.2%	7.1%

Return vs Industry: DIGI exceeded the RO Telecom industry which returned -8.2% over the past year.

Return vs Market: DIGI underperformed the RO Market which returned 7.1% over the past year.

Price Volatility

Is DIGI's price volatile compared to industry and market?
DIGI volatility
DIGI Average Weekly Movement	2.5%
Telecom Industry Average Movement	4.1%
Market Average Movement	3.8%
10% most volatile stocks in RO Market	6.4%
10% least volatile stocks in RO Market	2.6%

Stable Share Price: DIGI is less volatile than 75% of RO stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: DIGI's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2000	21,833	Serghei Bulgac	https://www.digi-communications.ro

Digi Communications N.V. provides telecommunication services in Romania, Spain, and Italy. Its services include cable television (TV), fixed internet and data, fixed line and mobile telephony, mobile telecommunication, mobile internet and data, and direct to home (DTH) satellite TV services. As of December 31, 2021, it had approximately 20.5 million revenue generating units.

Digi Communications Fundamentals Summary

How do Digi Communications's earnings and revenue compare to its market cap?
DIGI fundamental statistics
Market Cap	€728.32m
Earnings (TTM)	-€284.05m
Revenue (TTM)	€1.34b

0.5x

P/S Ratio

-2.6x

P/E Ratio

Is DIGI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DIGI income statement (TTM)
Revenue	€1.34b
Cost of Revenue	€1.14b
Gross Profit	€200.86m
Other Expenses	€484.91m
Earnings	-€284.05m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 15, 2022

Earnings per share (EPS)	-2.99
Gross Margin	14.94%
Net Profit Margin	-21.13%
Debt/Equity Ratio	162.6%

How did DIGI perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

-5%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DIGI. This is calculated by dividing DIGI's market cap by their current preferred multiple.
What is DIGI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€728.32m

DIGI 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/Revenue	1.3x
Enterprise Value/EBITDA	4.5x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does DIGI's PS Ratio compare to its peers?

DIGI PS Ratio vs Peers

The above table shows the PS ratio for DIGI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	3.6x
MTELEKOM Magyar Telekom Távközlési Nyilvánosan Müködö Részvénytársaság	0.4x	0.9%	Ft309.0b
IDT IDT	0.5x	n/a	US$700.1m
IBST Inti Bangun Sejahtera	12.5x	n/a	Rp11.6t
JAS Jasmine International	1.1x	2.0%	฿22.3b
DIGI Digi Communications	0.5x	8.6%	RON3.6b

Price-To-Sales vs Peers: DIGI is good value based on its Price-To-Sales Ratio (0.5x) compared to the peer average (3.6x).

Price to Earnings Ratio vs Industry

How does DIGI's PE Ratio compare vs other companies in the European Telecom Industry?

Price-To-Sales vs Industry: DIGI is good value based on its Price-To-Sales Ratio (0.5x) compared to the European Telecom industry average (1.3x)

Price to Sales Ratio vs Fair Ratio

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

DIGI PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.5x
Fair PS Ratio	n/a

Price-To-Sales vs Fair Ratio: Insufficient data to calculate DIGI's Price-To-Sales Fair Ratio for valuation analysis.

Share Price vs Fair Value

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

Below Fair Value: DIGI (RON37.5) is trading above our estimate of fair value (RON14.91)

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

Analyst Price Targets

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

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

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

Future Growth Score

4/6

Future Growth Score 4/6

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

80.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DIGI is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.1%).

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

High Growth Earnings: DIGI is expected to become profitable in the next 3 years.

Revenue vs Market: DIGI's revenue (8.6% per year) is forecast to grow faster than the RO market (3.4% per year).

High Growth Revenue: DIGI's revenue (8.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DIGI's Return on Equity is forecast to be low in 3 years time (15.8%).

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Past Performance

How has Digi Communications performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

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

-22.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DIGI is currently unprofitable.

Growing Profit Margin: DIGI is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: DIGI is unprofitable, and losses have increased over the past 5 years at a rate of 22.2% per year.

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

Earnings vs Industry: DIGI is unprofitable, making it difficult to compare its past year earnings growth to the Telecom industry (20.7%).

Return on Equity

High ROE: DIGI has a negative Return on Equity (15.13%), as it is currently unprofitable.

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Financial Health

How is Digi Communications'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: DIGI's short term assets (€540.8M) do not cover its short term liabilities (€642.3M).

Long Term Liabilities: DIGI's short term assets (€540.8M) do not cover its long term liabilities (€1.3B).

Debt to Equity History and Analysis

Debt Level: DIGI's net debt to equity ratio (112.4%) is considered high.

Reducing Debt: DIGI's debt to equity ratio has reduced from 1202.4% to 162.6% over the past 5 years.

Debt Coverage: DIGI's debt is well covered by operating cash flow (38.2%).

Interest Coverage: DIGI's interest payments on its debt are well covered by EBIT (3x coverage).

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.96%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: DIGI's dividend (1.96%) isn’t notable compared to the bottom 25% of dividend payers in the RO market (2.88%).

High Dividend: DIGI's dividend (1.96%) is low compared to the top 25% of dividend payers in the RO market (7.14%).

Stability and Growth of Payments

Stable Dividend: DIGI has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: DIGI's dividend payments have increased, but the company has only paid a dividend for 4 years.

Earnings Payout to Shareholders

Earnings Coverage: DIGI is paying a dividend but the company is unprofitable.

Cash Payout to Shareholders

Cash Flow Coverage: DIGI is paying a dividend but the company has no free cash flows.

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Management

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

5.6yrs

Average board tenure

CEO

Serghei Bulgac (45 yo)

7.58yrs

Tenure

€1,596,596

Compensation

Mr. Serghei Bulgac serves as the Chief Executive Officer at S.C RCS & RDS S.A. (formerly known as DIGI COMMUNICATIONS N.V). and S.C. RCS & RDS S.A. and has been its Executive Director at S.C RCS & RDS S.A...

CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Serghei's total compensation is reasonable compared to companies of similar size in the RO market.

Compensation vs Earnings: Serghei's compensation has increased whilst the company is unprofitable.

Board Members

Experienced Board: DIGI's board of directors are considered experienced (5.6 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.

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/08/14 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31