Millicom International Cellular Sa (NASDAQ: TIGO)

Sector: Communication Services Industry: Telecom Services CIK: 0000912958
Market Cap 7.93 Bn
P/B 3.65
P/E -39.64
P/S 1.90
ROIC (Qtr) 9.04
Div Yield % 3.13
Rev 1y % (Qtr) -0.77
Total Debt (Qtr) 8.44 Bn
Debt/Equity (Qtr) 2.53
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About

Millicom International Cellular SA, better known as TIGO, is a significant player in the telecommunications industry, operating in Latin America and Africa. The company offers an array of services, encompassing mobile and fixed-line voice and data services, internet, and television services. TIGO's business model primarily revolves around the provision of mobile and fixed-line voice and data services, internet, and television services. The company's product portfolio spans across various brand names such as TIGO, TIGO Business, and TIGO Money....

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Investment thesis

Bull case

  • Healthy cash reserves of 1.71B provide 2.61x coverage of short-term debt 656M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 1.71B provides exceptional 131.62x coverage of minority interest expenses 13M, showing strong core operations.
  • Operating cash flow of 1.71B provides strong 90.05x coverage of stock compensation 19M, indicating sustainable incentive practices.
  • Tangible assets of 8.50B provide exceptional 97.66x coverage of deferred revenue 87M, showing strong service capability backing.
  • Operating cash flow of 1.71B provides strong 19.67x coverage of deferred revenue 87M, indicating service delivery capability.

Bear case

  • Operating cash flow of 1.71B barely covers its investment activities of (96M), with a coverage ratio of -17.82, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • High receivables of 374M relative to inventory of 68M (5.50 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 2.13B show weak coverage of depreciation charges of 1.21B, with a 1.77 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 1.21B relative to operating cash flow of 1.71B, which is 0.70x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 972M represents just -6.48x of debt issuance (150M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Timing of transfer of goods or services [axis] Breakdown of Revenue (2024)

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Telecom Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMUS T-Mobile US, Inc. 247.58 Bn 22.52 2.80 118.74 Bn
2 T At&T Inc. 210.50 Bn 12.86 1.15 155.04 Bn
3 VZ Verizon Communications Inc 202.20 Bn 11.00 1.54 181.64 Bn
4 CMCSA Comcast Corp 180.83 Bn 58.43 5.08 98.94 Bn
5 VOD Vodafone Group Public Ltd Co 44.88 Bn 3.20 0.62 60.54 Bn
6 CHT Chunghwa Telecom Co Ltd 33.41 Bn 26.87 4.32 1.20 Bn
7 SATS EchoStar CORP 32.60 Bn -2.52 2.15 30.58 Bn
8 CHTR Charter Communications, Inc. /Mo/ 32.03 Bn 6.42 0.58 96.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.83 0.87
EV to Cash from Ops. EV/CFO 16.94 7.73
EV to Debt EV to Debt 1.53 40.31
EV to EBIT EV/EBIT 29.44 2.24
EV to EBITDA EV/EBITDA 8.96 2.53
EV to Free Cash Flow [EV/FCF] EV/FCF 143.59 33.34
EV to Market Cap EV to Market Cap 1.63 1.71
EV to Revenue EV/Rev 3.10 5.12
Price to Book Value [P/B] P/B 3.65 2.16
Price to Earnings [P/E] P/E -39.64 76.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -0.17
Dividend Payout Ratio % Div Payout % (Qtr) 38.20 2.05
Dividend per Basic Share Div per Share (Qtr) 4.50 0.79
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 78.25 8.04
Interest Coverage Int. cover (Qtr) 3.16 -2.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 13.97 19.27
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 100.12 61.85
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.07
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 251.86 373.65
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.73 192.47
EBIT Growth (1y) % EBIT 1y % (Qtr) 53.02 814.56
EBT Growth (1y) % EBT 1y % (Qtr) 120.76 -29.03
EPS Growth (1y) % EPS 1y % (Qtr) 603.23 141.81
FCF Growth (1y) % FCF 1y % (Qtr) 41.48 78.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.78 -10.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.36 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.51 0.68
Current Ratio Curr Ratio (Qtr) 0.92 1.56
Debt to Equity Ratio Debt/Equity (Qtr) 2.53 -0.46
Interest Cover Ratio Int Coverage (Qtr) 3.16 -2.53
Times Interest Earned Times Interest Earned (Qtr) 3.16 -2.53
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 59.60 46.49
EBIT Margin % EBIT Margin % (Qtr) 38.08 -51.60
EBT Margin % EBT Margin % (Qtr) 26.05 27.73
Gross Margin % Gross Margin % (Qtr) 77.00 55.49
Net Profit Margin % Net Margin % (Qtr) 20.20 26.33