Assessing Millicom (NasdaqGS:TIGO) Valuation After Standout Year-to-Date Share Price Surge

Millicom International Cellular (NasdaqGS:TIGO) has generated investor curiosity with its recent stock performance. Shares have seen some ups and downs over the past month, creating an interesting setup for those tracking long-term returns.

See our latest analysis for Millicom International Cellular.

Millicom's share price has had a standout run this year, up nearly 88% year-to-date, while its one-year total shareholder return sits just shy of 96%. Recent momentum suggests investors remain optimistic, following a remarkable three-year total return above 380%. However, some short-term volatility still reflects shifting sentiment around risk and growth potential.

If Millicom’s surge has you looking for what's next, this could be the moment to widen your search and discover fast growing stocks with high insider ownership

Despite the stellar returns, valuations appear mixed. This raises a key question for investors: is Millicom still trading below its intrinsic value, or has the market already priced in future growth and potential upside?

Most Popular Narrative: 4% Undervalued

The narrative puts Millicom’s fair value at $49.14, just above the last close price of $47.16. This suggests analysts see a modest upside, even with the recent rally and increased price targets.

While the company is returning significant capital to shareholders via special and regular dividends, the combination of large-scale M&A, elevated leverage near 2.5x, and ongoing refinancing needs could constrain future shareholder returns and increase vulnerability to rising interest rates. This could have an adverse effect on net earnings if market conditions or funding costs deteriorate.

Read the complete narrative.

Want to know the secret behind this narrow undervaluation? This narrative hinges on specific forecasts for falling profit margins and bold earnings assumptions. Curious which numbers, trends and analyst disagreements are driving that price target? Explore the full narrative to uncover the details behind the valuation debate.

Result: Fair Value of $49.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a pickup in postpaid momentum or improved efficiency, especially in key Latin American markets, could challenge the cautious narrative from some analysts.

Find out about the key risks to this Millicom International Cellular narrative.

Build Your Own Millicom International Cellular Narrative

If you would rather dig into the numbers yourself or want to compare your outlook to the consensus view, you can easily build your own perspective on Millicom in just a few minutes. Do it your way

A great starting point for your Millicom International Cellular research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Move ahead of the crowd and boost your portfolio by targeting up-and-coming opportunities tailored to today’s market. Don’t overlook what others are finding first.

• Capture steady payouts by targeting these 17 dividend stocks with yields > 3% that offer yields above 3% and consistent cash flow for income-focused investors.
• Ride the wave of innovation by uncovering these 24 AI penny stocks powering advancements in automation, smart data, and intelligent systems.
• Position yourself ahead of major trends with these 3596 penny stocks with strong financials showing strong financials and high growth potential before they hit the spotlight.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com