DASHBOARD: Telco valuation comps for April 2023

Dashboard containing:

• Monthly and annual share price movements for main listed stocks
• Key earnings multiples
• Forward earnings multiples vs forward growth estimates
• Share price movements tracked over last twelve months

Commentary

Key developments

Overall, telco stocks in Australia and New Zealand are down over the last year, with wide spreads in performance among the group. Overall, economic growth is expected to be sluggish relative to 2022, creating uncertain performance for telco equities.

Megaport

Megaport stock launched 40% in a single sitting on April 28th, rebounding from the stock’s poor performance in months prior. Megaport rose on the news that the company expects to materially outperform market consensus – the company expects to report normalised EBITDA in FY23 in the range of $16m to $18m, and $41m to $46m in FY24.

TPG

TPG was up 10% in April despite any company announcements, this may be attributed to the stock being viewed as undervalued given its heavy sell off in late 2022, and expectations that TPG will benefit from the tailwinds for the telecom industry as it transitions from 4G to 5G.

Pentanet

Pentanet continued its volatile share price performance in April, down 24%, wiping off any gain after it announced its landmark deal with Optus. In April the company announced it is raising $6.1m via a placement and an additional $2.5m share purchase plan to help fund it upgrade its existing tower sites with 5G infrastructure.