MTN Group (JSE:MTN) - Share price, News & Analysis

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

MTN (ZAR119.41) is trading below our estimate of [[fair value]] (ZAR362.02)

MTN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	5/6
Past Performance	6/6
Financial Health	5/6
Dividends	2/6

MTN Stock Overview

MTN Group Limited, together with its subsidiaries, operates in the mobile telecommunications industry.

Rewards

Trading at 67% below our estimate of its fair value

Earnings are forecast to grow 20.14% per year

Earnings grew by 152.2% over the past year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

No risks detected for MTN from our risk checks.

MTN Group Competitors

Vodacom Group

JSE:VOD

R207.6b

China United Network Communications

SHSE:600050

CN¥103.4b

Advanced Info Service

SET:ADVANC

฿581.5b

Safaricom

NASE:SCOM

KSh999.6b

Price History & Performance

Summary of all time highs, changes and price drops for MTN Group
Historical stock prices
Current Share Price	R119.41
52 Week High	R211.49
52 Week Low	R116.65
Beta	0.79
1 Month Change	-5.46%
3 Month Change	-12.68%
1 Year Change	-15.53%
3 Year Change	29.37%
5 Year Change	-1.80%
Change since IPO	6,723.43%

Recent News & Updates

Aug 22

MTN Group (JSE:MTN) Has A Pretty Healthy Balance Sheet

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' It's only natural to consider a company's...

Shareholder Returns

	MTN	ZA Wireless Telecom	ZA Market
7D	-6.2%	-4.2%	-2.6%
1Y	-15.5%	-17.3%	-7.0%

Return vs Industry: MTN matched the ZA Wireless Telecom industry which returned -15.9% over the past year.

Return vs Market: MTN underperformed the ZA Market which returned -5.6% over the past year.

Price Volatility

Is MTN's price volatile compared to industry and market?
MTN volatility
MTN Average Weekly Movement	5.2%
Wireless Telecom Industry Average Movement	5.2%
Market Average Movement	5.5%
10% most volatile stocks in ZA Market	10.0%
10% least volatile stocks in ZA Market	3.1%

Stable Share Price: MTN is not significantly more volatile than the rest of ZA stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MTN's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1994	21,975	Ralph Mupita	https://www.mtn.com

MTN Group Limited, together with its subsidiaries, operates in the mobile telecommunications industry. The company provides data, voice and SMS, digital and fintech, wholesale, and interconnect and roaming services, as well as sells mobile devices. It also offers network as a service, which include subsea cables providing international connectivity services; terrestrial and metro fiber networks; data centers and cable landing stations; and FTTx, towers, and radio access networks.

MTN Group Fundamentals Summary

How do MTN Group's earnings and revenue compare to its market cap?
MTN fundamental statistics
Market Cap	R215.62b
Earnings (TTM)	R19.11b
Revenue (TTM)	R192.73b

11.3x

P/E Ratio

1.1x

P/S Ratio

Is MTN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MTN income statement (TTM)
Revenue	R192.73b
Cost of Revenue	R63.07b
Gross Profit	R129.65b
Other Expenses	R110.54b
Earnings	R19.11b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	10.59
Gross Margin	67.27%
Net Profit Margin	9.92%
Debt/Equity Ratio	73.5%

How did MTN perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

28%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

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 MTN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MTN. This is calculated by dividing MTN's market cap by their current preferred multiple.
What is MTN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R215.62b

MTN 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	1.7x
Enterprise Value/EBITDA	3.9x
PEG Ratio	0.6x

Price to Earnings Ratio vs Peers

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

MTN PE Ratio vs Peers

The above table shows the PE ratio for MTN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	15.9x
VOD Vodacom Group	12.1x	10.6%	R207.6b
600050 China United Network Communications	14.7x	10.4%	CN¥103.4b
ADVANC Advanced Info Service	22.4x	9.3%	฿581.5b
SCOM Safaricom	14.4x	8.7%	KSh999.6b
MTN MTN Group	11.3x	20.1%	R215.6b

Price-To-Earnings vs Peers: MTN is good value based on its Price-To-Earnings Ratio (11.3x) compared to the peer average (15.9x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: MTN is good value based on its Price-To-Earnings Ratio (11.3x) compared to the Global Wireless Telecom industry average (14.7x)

Price to Earnings Ratio vs Fair Ratio

What is MTN'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.

MTN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.3x
Fair PE Ratio	18.1x

Price-To-Earnings vs Fair Ratio: MTN is good value based on its Price-To-Earnings Ratio (11.3x) compared to the estimated Fair Price-To-Earnings Ratio (18.1x).

Share Price vs Fair Value

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

Below Fair Value: MTN (ZAR119.41) is trading below our estimate of fair value (ZAR362.02)

Significantly Below Fair Value: MTN 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: 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 MTN Group forecast to perform in the next 1 to 3 years based on estimates from 8 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

20.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTN's forecast earnings growth (20.1% per year) is above the savings rate (9%).

Earnings vs Market: MTN's earnings (20.1% per year) are forecast to grow faster than the ZA market (-1.3% per year).

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

Revenue vs Market: MTN's revenue (10.2% per year) is forecast to grow faster than the ZA market (5.7% per year).

High Growth Revenue: MTN's revenue (10.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MTN's Return on Equity is forecast to be high in 3 years time (20.7%)

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Past Performance

How has MTN Group performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

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

22.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MTN has high quality earnings.

Growing Profit Margin: MTN's current net profit margins (9.9%) are higher than last year (4.2%).

Past Earnings Growth Analysis

Earnings Trend: MTN's earnings have grown significantly by 22.5% per year over the past 5 years.

Accelerating Growth: MTN's earnings growth over the past year (152.2%) exceeds its 5-year average (22.5% per year).

Earnings vs Industry: MTN earnings growth over the past year (152.2%) exceeded the Wireless Telecom industry 2.5%.

Return on Equity

High ROE: MTN's Return on Equity (20.1%) is considered high.

Discover strong past performing companies

Financial Health

How is MTN Group's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

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

Financial Position Analysis

Short Term Liabilities: MTN's short term assets (ZAR126.3B) do not cover its short term liabilities (ZAR136.7B).

Long Term Liabilities: MTN's short term assets (ZAR126.3B) exceed its long term liabilities (ZAR121.9B).

Debt to Equity History and Analysis

Debt Level: MTN's net debt to equity ratio (34.5%) is considered satisfactory.

Reducing Debt: MTN's debt to equity ratio has reduced from 81.8% to 73.5% over the past 5 years.

Debt Coverage: MTN's debt is well covered by operating cash flow (77.6%).

Interest Coverage: MTN's interest payments on its debt are well covered by EBIT (4.9x coverage).

Balance Sheet

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Dividend

What is MTN Group 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

2.51%

Current Dividend Yield

Dividend Yield vs Market

MTN Group Dividend Yield vs Market

How does MTN Group dividend yield compare to the market?
Segment	Dividend Yield
Company (MTN Group)	2.5%
Market Bottom 25% (ZA)	3.5%
Market Top 25% (ZA)	8.9%
Industry Average (Wireless Telecom)	5.7%
Analyst forecast in 3 Years (MTN Group)	3.4%

Notable Dividend: MTN's dividend (2.51%) isn’t notable compared to the bottom 25% of dividend payers in the ZA market (3.49%).

High Dividend: MTN's dividend (2.51%) is low compared to the top 25% of dividend payers in the ZA market (8.97%).

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (28.3%), MTN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (24.6%), MTN's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

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

2.0yrs

Average management tenure

CEO

Ralph Mupita (50 yo)

5.42yrs

Tenure

R51,310,000

Compensation

Mr. Ralph Tendai Mupita, BSc (Hons)(Eng.), MBA, GMP (Harvard), serves as Non-Executive Director of MTN Nigeria Communications PLC since April 13, 2017. He served as a Non-Executive Director at Scancom Plc...

CEO Compensation Analysis

Ralph Mupita's Compensation vs MTN Group Earnings

How has Ralph Mupita's remuneration changed compared to MTN Group's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	R19b
Mar 31 2022	n/a	n/a	R16b
Dec 31 2021	R51m	R15m	R14b
Sep 30 2021	n/a	n/a	R11b
Jun 30 2021	n/a	n/a	R8b
Mar 31 2021	n/a	n/a	R12b
Dec 31 2020	R31m	R12m	R17b
Sep 30 2020	n/a	n/a	R17b
Jun 30 2020	n/a	n/a	R17b
Mar 31 2020	n/a	n/a	R13b
Dec 31 2019	R66m	R9m	R9b
Sep 30 2019	n/a	n/a	R9b
Jun 30 2019	n/a	n/a	R9b
Mar 31 2019	n/a	n/a	R9b
Dec 31 2018	R23m	R8m	R9b
Sep 30 2018	n/a	n/a	R6b
Jun 30 2018	n/a	n/a	R3b
Mar 31 2018	n/a	n/a	R4b
Dec 31 2017	R20m	R6m	R4b

Compensation vs Market: Ralph's total compensation ($USD2.85M) is about average for companies of similar size in the ZA market ($USD2.69M).

Compensation vs Earnings: Ralph's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: MTN's management team is considered experienced (2 years average tenure).

Board Members

Experienced Board: MTN's board of directors are considered experienced (4.8 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

What is the ownership structure of MTN?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	920,000	0.05%
Private Companies	121,330,000	6.7%
General Public	658,507,410	36.5%
Institutions	1,024,927,753	56.8%

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

Top Shareholders

Top 25 shareholders own 57.5% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
22.97%	Public Investment Corporation Limited	414,798,034	ZAR49.5b	0%	6.73%
6.72%	M1 Limited	121,330,000	ZAR14.5b	0%	no data
5.31%	Coronation Fund Managers Limited	95,909,331	ZAR11.5b	426.25%	5.48%
5.24%	M&G Investment Management Limited	94,626,926	ZAR11.3b	0%	1.58%
4.02%	The Vanguard Group, Inc.	72,547,441	ZAR8.7b	1.42%	0.01%
2.51%	BlackRock, Inc.	45,339,862	ZAR5.4b	-0.16%	0.01%
1.88%	Capital Research and Management Company	33,968,524	ZAR4.1b	0.16%	0.02%
1.36%	Dimensional Fund Advisors LP	24,586,854	ZAR2.9b	-0.19%	0.04%
1.17%	Norges Bank Investment Management	21,110,587	ZAR2.5b	0%	0.02%
1.12%	Sanlam Investment Management (Pty) Ltd.	20,293,360	ZAR2.4b	0%	2.18%
0.93%	Ninety One UK Limited	16,833,736	ZAR2.0b	0%	0.2%
0.69%	Old Mutual Investment Group (Pty) Limited	12,410,045	ZAR1.5b	0%	1.53%
0.54%	Geode Capital Management, LLC	9,828,629	ZAR1.2b	2.2%	0.01%
0.35%	Charles Schwab Investment Management, Inc.	6,263,713	ZAR747.9m	1.32%	0.01%
0.33%	UBS Asset Management	5,991,011	ZAR715.4m	3.01%	0.01%
0.33%	STANLIB Collective Investments Limited	5,904,916	ZAR705.1m	0%	6.04%
0.32%	Fidelity International Ltd	5,859,933	ZAR699.7m	0%	0.02%
0.29%	Allspring Global Investments, LLC	5,256,077	ZAR627.6m	15.74%	0.06%
0.23%	abrdn plc	4,228,905	ZAR505.0m	-4.44%	0.03%
0.21%	Amundi Asset Management	3,854,973	ZAR460.3m	-3.38%	0.01%
0.2%	Teachers Insurance and Annuity Association-College Retirement Equities Fund	3,600,213	ZAR429.9m	0.21%	0.01%
0.2%	Old Mutual Customised Solutions (Pty) Limited	3,526,653	ZAR421.1m	0%	5.36%
0.19%	Credit Suisse Asset Management (Switzerland)	3,465,211	ZAR413.8m	-0.9%	0.02%
0.18%	Taquanta Asset Managers (Pty) Ltd	3,326,008	ZAR397.2m	0%	4.08%
0.18%	Strategic Advisers LLC	3,319,865	ZAR396.4m	-16.34%	0.02%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
MTNO.F	OTCPK (Pink Sheets LLC)	Yes	Ordinary Shares	US	USD	Aug 1995
MTN	JSE (The Johannesburg Securities Exchange)	Yes	Ordinary Shares	ZA	ZAR	Aug 1995
LL6	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Aug 1995
MTNO.Y	OTCPK (Pink Sheets LLC)		ADR EACH REPR 1 ORD ZAR0.0001(BNY)	US	USD	Dec 2001
LL6A	BST (Boerse-Stuttgart)		ADR EACH REPR 1 ORD ZAR0.0001(BNY)	DE	EUR	Dec 2001

Data	Last Updated (UTC time)
Company Analysis	2022/09/29 00:00
End of Day Share Price	2022/09/29 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31