Is Millicom’s (TIGO) Profit Surge With Weaker Sales Shifting Its Long-Term Investment Case?

• Millicom International Cellular S.A. recently reported second quarter 2025 results, posting a substantial year-over-year rise in net income to US$676 million, despite lower sales of US$1.37 billion compared to the previous year.
• Alongside the earnings release, the company approved an interim dividend of US$2.50 per share, payable in two installments, signaling continued shareholder returns even as revenues softened.
• We will explore how Millicom's strong earnings growth, despite declining sales, impacts the company’s longer-term investment outlook.

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Millicom International Cellular Investment Narrative Recap

To be a shareholder in Millicom International Cellular, an investor needs to believe in the company’s ability to drive efficiency and profitability, even as top-line growth faces pressure from market maturity and regional volatility. The recent surge in net income, while sales declined, may not materially alter the most important short-term catalyst: sustaining equity free cash flow to support debt reduction. However, risks around currency fluctuations, especially in core markets like Colombia, remain top of mind and could impact future results.

Among recent company announcements, the board’s approval of an interim dividend of US$2.50 per share, payable in two installments, stands out. This move underscores management’s commitment to shareholder returns and aligns with Millicom’s ongoing efforts to optimize capital allocation, even as underlying revenue and EBITDA are exposed to external risks like macroeconomic conditions and legal disputes.

But despite robust dividends and an earnings boost, investors should also be aware of the impact that currency shifts, particularly a weakening Colombian peso, could have on...

Read the full narrative on Millicom International Cellular (it's free!)

Millicom International Cellular's outlook anticipates $5.9 billion in revenue and $609.3 million in earnings by 2028. This scenario assumes annual revenue growth of 1.0% and an earnings increase of $252.3 million from the current $357.0 million.

Uncover how Millicom International Cellular's forecasts yield a $41.05 fair value, a 3% downside to its current price.

Exploring Other Perspectives

Fair value estimates from five Simply Wall St Community members for Millicom International Cellular range widely from US$35.00 to US$83.02 per share, reflecting sharply different outlooks. While many investors see potential, ongoing currency risks in Colombia could significantly affect overall performance, highlighting the importance of reviewing alternative opinions and risks.

Explore 5 other fair value estimates on Millicom International Cellular - why the stock might be worth as much as 95% more than the current price!

Build Your Own Millicom International Cellular Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Millicom International Cellular research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Millicom International Cellular's overall financial health at a glance.

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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.

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