DASHBOARD: Telco valuation comps for May 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. Economic growth is expected to be sluggish relative to 2022, creating uncertain performance for telco equities.

Megaport

Megaport continued its strong recent performance, with the stock rising a further 17% in May after its surge in April. This suggests investors have a renewed confidence in the company after its investor presentation in late April revealed that the company expects to materially outperform market consensus.

Aussie Broadband

Aussie Broadband fell around 14% in May despite making no company announcements, shaving off small gains the stock made in April and March. This decrease is correlated with the S&P/ASX Small Ordinaries index fall in May.

Swoop

Swoop’s stock continued its downward trend, falling 13% in May, and bringing the stock to a 41% decrease in the last 6 months. This can be partially attributed to the company still being unprofitable, and one-off costs boosted Swoop’s 1H23 loss. However, the company is generating strong revenue growth, and expects to exit FY23 in a cashflow-neutral position.