Rostelecom (MISX:RTKM) - Share price, News & Analysis

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

RTKM (RUB66.54) is trading below our estimate of [[fair value]] (RUB421.17)

RTKM fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	5/6
Past Performance	3/6
Financial Health	1/6
Dividends	2/6

RTKM Stock Overview

Public Joint Stock Company Rostelecom provides digital services and solutions in Russia.

Rewards

Trading at 84.2% below our estimate of its fair value

Earnings are forecast to grow 25.31% per year

Earnings have grown 19% per year over the past 5 years

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 6.85% is not well covered by earnings

Large one-off items impacting financial results

Rostelecom Competitors

Moscow City Telephone Network

MISX:MGTS

₽117.2b

Tattelecom

MISX:TTLK

₽10.3b

Sistema Financial

MISX:AFKS

₽142.3b

Mobile TeleSystems

MISX:MTSS

₽457.3b

Price History & Performance

Summary of all time highs, changes and price drops for Rostelecom
Historical stock prices
Current Share Price	₽66.54
52 Week High	₽98.43
52 Week Low	₽45.45
Beta	0.36
1 Month Change	0%
3 Month Change	12.74%
1 Year Change	-31.83%
3 Year Change	-18.45%
5 Year Change	3.56%
Change since IPO	-55.43%

Shareholder Returns

	RTKM	RU Telecom	RU Market
7D	0%	0%	0%
1Y	-31.8%	-30.3%	-32.4%

Return vs Industry: RTKM underperformed the Russian Telecom industry which returned -29.6% over the past year.

Return vs Market: RTKM matched the Russian Market which returned -32.1% over the past year.

Price Volatility

Is RTKM's price volatile compared to industry and market?
RTKM volatility
RTKM Average Weekly Movement	3.9%
Telecom Industry Average Movement	4.1%
Market Average Movement	5.0%
10% most volatile stocks in RU Market	8.4%
10% least volatile stocks in RU Market	3.0%

Stable Share Price: RTKM is not significantly more volatile than the rest of Russian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: RTKM's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1993	n/a	Mikhail Oseevsky	https://moscow.rt.ru

Public Joint Stock Company Rostelecom provides digital services and solutions in Russia. The company provides Rostelecom Key, an ecosystem of services for households that offers smart intercom, smart gate bar, and smart meter solutions, as well as integrated video surveillance platform; Pay TV; Wink, a digital video services; and smart home services. It also offers antivirus solutions; Wi-Fi 2.0 platform; corporate TV’s; virtual BX; toll-free calling 8-800; Game-RT-X routers; IT solutions for municipal solid waste management; video surveillance services; and VDI/VDC and cyber security services.

Rostelecom Fundamentals Summary

How do Rostelecom's earnings and revenue compare to its market cap?
RTKM fundamental statistics
Market Cap	₽222.76b
Earnings (TTM)	₽28.55b
Revenue (TTM)	₽580.09b

7.8x

P/E Ratio

0.4x

P/S Ratio

Is RTKM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RTKM income statement (TTM)
Revenue	₽580.09b
Cost of Revenue	₽260.25b
Gross Profit	₽319.84b
Other Expenses	₽291.29b
Earnings	₽28.55b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Nov 01, 2022

Earnings per share (EPS)	8.52
Gross Margin	55.14%
Net Profit Margin	4.92%
Debt/Equity Ratio	195.4%

How did RTKM perform over the long term?

See historical performance and comparison

Dividends

6.9%

Current Dividend Yield

59%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings 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 RTKM?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RTKM. This is calculated by dividing RTKM's market cap by their current preferred multiple.
What is RTKM's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₽222.76b

RTKM 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	4.8x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

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

RTKM PE Ratio vs Peers

The above table shows the PE ratio for RTKM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	18.4x
MGTS Moscow City Telephone Network	9.3x	n/a	₽117.2b
TTLK Tattelecom	3.9x	n/a	₽10.3b
AFKS Sistema Financial	51.8x	10.1%	₽142.3b
MTSS Mobile TeleSystems	8.7x	22.1%	₽457.3b
RTKM Rostelecom	7.8x	25.3%	₽222.8b

Price-To-Earnings vs Peers: RTKM is good value based on its Price-To-Earnings Ratio (7.8x) compared to the peer average (18.4x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: RTKM is expensive based on its Price-To-Earnings Ratio (7.8x) compared to the Russian Telecom industry average (7.8x)

Price to Earnings Ratio vs Fair Ratio

What is RTKM'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.

RTKM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.8x
Fair PE Ratio	13.7x

Price-To-Earnings vs Fair Ratio: RTKM is good value based on its Price-To-Earnings Ratio (7.8x) compared to the estimated Fair Price-To-Earnings Ratio (13.7x).

Share Price vs Fair Value

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

Below Fair Value: RTKM (RUB66.54) is trading below our estimate of fair value (RUB421.17)

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

Analyst Price Targets

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

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

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

Future Growth Score

5/6

Future Growth Score 5/6

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

25.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RTKM's forecast earnings growth (25.3% per year) is above the savings rate (7.5%).

Earnings vs Market: RTKM's earnings (25.3% per year) are forecast to grow faster than the Russian market (-1.5% per year).

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

Revenue vs Market: RTKM's revenue (4.8% per year) is forecast to grow faster than the Russian market (2.5% per year).

High Growth Revenue: RTKM's revenue (4.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RTKM's Return on Equity is forecast to be high in 3 years time (21.8%)

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Past Performance

How has Rostelecom performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

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

19.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RTKM has a large one-off gain of RUB8.3B impacting its December 31 2021 financial results.

Growing Profit Margin: RTKM's current net profit margins (4.9%) are higher than last year (4.3%).

Past Earnings Growth Analysis

Earnings Trend: RTKM's earnings have grown by 19% per year over the past 5 years.

Accelerating Growth: RTKM's earnings growth over the past year (22.4%) exceeds its 5-year average (19% per year).

Earnings vs Industry: RTKM earnings growth over the past year (22.4%) underperformed the Telecom industry 22.4%.

Return on Equity

High ROE: RTKM's Return on Equity (14%) is considered low.

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Financial Health

How is Rostelecom's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

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

Financial Position Analysis

Short Term Liabilities: RTKM's short term assets (RUB167.9B) do not cover its short term liabilities (RUB291.3B).

Long Term Liabilities: RTKM's short term assets (RUB167.9B) do not cover its long term liabilities (RUB584.2B).

Debt to Equity History and Analysis

Debt Level: RTKM's net debt to equity ratio (168.3%) is considered high.

Reducing Debt: RTKM's debt to equity ratio has increased from 75.1% to 195.4% over the past 5 years.

Debt Coverage: RTKM's debt is well covered by operating cash flow (34.3%).

Interest Coverage: RTKM's interest payments on its debt are not well covered by EBIT (2.1x coverage).

Balance Sheet

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Dividend

What is Rostelecom current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

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

6.85%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RTKM's dividend (6.85%) is higher than the bottom 25% of dividend payers in the Russian market (4.85%).

High Dividend: RTKM's dividend (6.85%) is low compared to the top 25% of dividend payers in the Russian market (13.13%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (58.8%), RTKM's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (330.1%), RTKM's dividend payments are not well covered by cash flows.

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Management

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

5.3yrs

Average management tenure

CEO

Mikhail Oseevsky (62 yo)

5.42yrs

Tenure

Mr. Mikhail Eduardovich Oseevsky has been the Chairman of The Management Board, CEO and President at Public Joint Stock Company Rostelecom (formerly known as Public Joint Stock Company Long-Distance and In...

Leadership Team

Experienced Management: RTKM's management team is seasoned and experienced (5.3 years average tenure).

Board Members

Experienced Board: RTKM's board of directors are considered experienced (5.2 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.

Data	Last Updated (UTC time)
Company Analysis	2022/08/08 00:00
End of Day Share Price	2022/07/08 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31