Intrinsic value of Telecom Argentina ADR - TEO

Previous Close

$31.70

  Intrinsic Value

$69.66

stock screener

  Rating & Target

str. buy

+120%

  Value-price divergence*

-158%

Previous close

$31.70

 
Intrinsic value

$69.66

 
Up/down potential

+120%

 
Rating

str. buy

 
Value-price divergence*

-158%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TEO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  31.52
  22.30
  20.57
  19.01
  17.61
  16.35
  15.22
  14.19
  13.27
  12.45
  11.70
  11.03
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.81
Revenue, $m
  3,413
  4,174
  5,033
  5,990
  7,044
  8,196
  9,443
  10,784
  12,215
  13,736
  15,343
  17,036
  18,812
  20,672
  22,615
  24,641
  26,750
  28,945
  31,228
  33,600
  36,065
  38,627
  41,290
  44,057
  46,936
  49,930
  53,047
  56,292
  59,673
  63,197
  66,872
Variable operating expenses, $m
 
  3,531
  4,258
  5,067
  5,960
  6,934
  7,989
  9,123
  10,334
  11,620
  12,980
  14,412
  15,915
  17,489
  19,132
  20,846
  22,631
  24,488
  26,419
  28,426
  30,511
  32,678
  34,931
  37,273
  39,708
  42,241
  44,878
  47,623
  50,484
  53,465
  56,574
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,911
  3,531
  4,258
  5,067
  5,960
  6,934
  7,989
  9,123
  10,334
  11,620
  12,980
  14,412
  15,915
  17,489
  19,132
  20,846
  22,631
  24,488
  26,419
  28,426
  30,511
  32,678
  34,931
  37,273
  39,708
  42,241
  44,878
  47,623
  50,484
  53,465
  56,574
Operating income, $m
  502
  643
  775
  922
  1,085
  1,262
  1,454
  1,661
  1,881
  2,115
  2,363
  2,624
  2,897
  3,184
  3,483
  3,795
  4,120
  4,458
  4,809
  5,174
  5,554
  5,949
  6,359
  6,785
  7,228
  7,689
  8,169
  8,669
  9,190
  9,732
  10,298
EBITDA, $m
  899
  1,084
  1,307
  1,556
  1,830
  2,129
  2,453
  2,802
  3,174
  3,569
  3,986
  4,426
  4,887
  5,371
  5,875
  6,402
  6,950
  7,520
  8,113
  8,729
  9,370
  10,035
  10,727
  11,446
  12,194
  12,972
  13,782
  14,625
  15,503
  16,419
  17,373
Interest expense (income), $m
  101
  106
  175
  253
  340
  436
  541
  655
  777
  908
  1,046
  1,193
  1,347
  1,509
  1,678
  1,855
  2,040
  2,232
  2,432
  2,640
  2,856
  3,081
  3,314
  3,557
  3,809
  4,071
  4,344
  4,628
  4,924
  5,232
  5,553
Earnings before tax, $m
  358
  537
  600
  669
  745
  826
  913
  1,006
  1,104
  1,208
  1,317
  1,431
  1,550
  1,675
  1,805
  1,940
  2,080
  2,226
  2,377
  2,535
  2,698
  2,868
  3,044
  3,228
  3,419
  3,618
  3,825
  4,041
  4,266
  4,501
  4,745
Tax expense, $m
  102
  145
  162
  181
  201
  223
  247
  272
  298
  326
  356
  386
  419
  452
  487
  524
  562
  601
  642
  684
  728
  774
  822
  872
  923
  977
  1,033
  1,091
  1,152
  1,215
  1,281
Net income, $m
  254
  392
  438
  489
  544
  603
  666
  734
  806
  882
  961
  1,045
  1,132
  1,223
  1,317
  1,416
  1,518
  1,625
  1,735
  1,850
  1,970
  2,094
  2,222
  2,357
  2,496
  2,641
  2,792
  2,950
  3,114
  3,285
  3,464

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  365
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,066
  3,302
  3,982
  4,739
  5,573
  6,484
  7,471
  8,531
  9,664
  10,867
  12,138
  13,478
  14,883
  16,355
  17,891
  19,494
  21,163
  22,900
  24,705
  26,582
  28,533
  30,559
  32,666
  34,856
  37,133
  39,502
  41,968
  44,535
  47,210
  49,998
  52,905
Adjusted assets (=assets-cash), $m
  2,701
  3,302
  3,982
  4,739
  5,573
  6,484
  7,471
  8,531
  9,664
  10,867
  12,138
  13,478
  14,883
  16,355
  17,891
  19,494
  21,163
  22,900
  24,705
  26,582
  28,533
  30,559
  32,666
  34,856
  37,133
  39,502
  41,968
  44,535
  47,210
  49,998
  52,905
Revenue / Adjusted assets
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
  1.264
Average production assets, $m
  1,805
  2,208
  2,662
  3,168
  3,727
  4,336
  4,996
  5,705
  6,462
  7,266
  8,116
  9,012
  9,952
  10,936
  11,963
  13,035
  14,151
  15,312
  16,519
  17,774
  19,078
  20,434
  21,842
  23,306
  24,829
  26,413
  28,062
  29,779
  31,567
  33,431
  35,375
Working capital, $m
  -61
  -280
  -337
  -401
  -472
  -549
  -633
  -723
  -818
  -920
  -1,028
  -1,141
  -1,260
  -1,385
  -1,515
  -1,651
  -1,792
  -1,939
  -2,092
  -2,251
  -2,416
  -2,588
  -2,766
  -2,952
  -3,145
  -3,345
  -3,554
  -3,772
  -3,998
  -4,234
  -4,480
Total debt, $m
  753
  915
  1,325
  1,781
  2,285
  2,834
  3,429
  4,068
  4,751
  5,477
  6,244
  7,051
  7,899
  8,786
  9,713
  10,679
  11,685
  12,733
  13,821
  14,953
  16,129
  17,351
  18,621
  19,942
  21,315
  22,744
  24,230
  25,779
  27,392
  29,073
  30,826
Total liabilities, $m
  1,829
  1,991
  2,401
  2,857
  3,361
  3,910
  4,505
  5,144
  5,827
  6,553
  7,320
  8,127
  8,975
  9,862
  10,789
  11,755
  12,761
  13,809
  14,897
  16,029
  17,205
  18,427
  19,697
  21,018
  22,391
  23,820
  25,306
  26,855
  28,468
  30,149
  31,902
Total equity, $m
  1,237
  1,311
  1,581
  1,881
  2,213
  2,574
  2,966
  3,387
  3,837
  4,314
  4,819
  5,351
  5,909
  6,493
  7,103
  7,739
  8,402
  9,091
  9,808
  10,553
  11,327
  12,132
  12,968
  13,838
  14,742
  15,682
  16,661
  17,680
  18,742
  19,849
  21,003
Total liabilities and equity, $m
  3,066
  3,302
  3,982
  4,738
  5,574
  6,484
  7,471
  8,531
  9,664
  10,867
  12,139
  13,478
  14,884
  16,355
  17,892
  19,494
  21,163
  22,900
  24,705
  26,582
  28,532
  30,559
  32,665
  34,856
  37,133
  39,502
  41,967
  44,535
  47,210
  49,998
  52,905
Debt-to-equity ratio
  0.609
  0.700
  0.840
  0.950
  1.030
  1.100
  1.160
  1.200
  1.240
  1.270
  1.300
  1.320
  1.340
  1.350
  1.370
  1.380
  1.390
  1.400
  1.410
  1.420
  1.420
  1.430
  1.440
  1.440
  1.450
  1.450
  1.450
  1.460
  1.460
  1.460
  1.470
Adjusted equity ratio
  0.323
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397
  0.397

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  254
  392
  438
  489
  544
  603
  666
  734
  806
  882
  961
  1,045
  1,132
  1,223
  1,317
  1,416
  1,518
  1,625
  1,735
  1,850
  1,970
  2,094
  2,222
  2,357
  2,496
  2,641
  2,792
  2,950
  3,114
  3,285
  3,464
Depreciation, amort., depletion, $m
  397
  442
  532
  634
  745
  867
  999
  1,141
  1,292
  1,453
  1,623
  1,802
  1,990
  2,187
  2,393
  2,607
  2,830
  3,062
  3,304
  3,555
  3,816
  4,087
  4,368
  4,661
  4,966
  5,283
  5,612
  5,956
  6,313
  6,686
  7,075
Funds from operations, $m
  539
  834
  971
  1,122
  1,289
  1,470
  1,666
  1,875
  2,098
  2,335
  2,585
  2,847
  3,122
  3,410
  3,710
  4,023
  4,348
  4,687
  5,039
  5,405
  5,785
  6,180
  6,591
  7,018
  7,462
  7,924
  8,405
  8,906
  9,428
  9,972
  10,539
Change in working capital, $m
  -188
  -51
  -58
  -64
  -71
  -77
  -84
  -90
  -96
  -102
  -108
  -113
  -119
  -125
  -130
  -136
  -141
  -147
  -153
  -159
  -165
  -172
  -178
  -185
  -193
  -201
  -209
  -217
  -227
  -236
  -246
Cash from operations, $m
  727
  885
  1,028
  1,186
  1,360
  1,547
  1,749
  1,965
  2,194
  2,437
  2,692
  2,960
  3,241
  3,534
  3,840
  4,159
  4,490
  4,834
  5,192
  5,564
  5,950
  6,352
  6,769
  7,203
  7,655
  8,124
  8,614
  9,123
  9,654
  10,208
  10,785
Maintenance CAPEX, $m
  0
  -361
  -442
  -532
  -634
  -745
  -867
  -999
  -1,141
  -1,292
  -1,453
  -1,623
  -1,802
  -1,990
  -2,187
  -2,393
  -2,607
  -2,830
  -3,062
  -3,304
  -3,555
  -3,816
  -4,087
  -4,368
  -4,661
  -4,966
  -5,283
  -5,612
  -5,956
  -6,313
  -6,686
New CAPEX, $m
  -726
  -404
  -454
  -506
  -558
  -609
  -660
  -709
  -757
  -804
  -850
  -895
  -940
  -984
  -1,028
  -1,072
  -1,116
  -1,161
  -1,207
  -1,255
  -1,304
  -1,355
  -1,408
  -1,464
  -1,523
  -1,584
  -1,649
  -1,717
  -1,789
  -1,864
  -1,944
Cash from investing activities, $m
  -726
  -765
  -896
  -1,038
  -1,192
  -1,354
  -1,527
  -1,708
  -1,898
  -2,096
  -2,303
  -2,518
  -2,742
  -2,974
  -3,215
  -3,465
  -3,723
  -3,991
  -4,269
  -4,559
  -4,859
  -5,171
  -5,495
  -5,832
  -6,184
  -6,550
  -6,932
  -7,329
  -7,745
  -8,177
  -8,630
Free cash flow, $m
  1
  120
  132
  148
  168
  193
  222
  257
  296
  340
  389
  442
  499
  560
  625
  694
  767
  843
  922
  1,005
  1,091
  1,181
  1,274
  1,371
  1,471
  1,575
  1,682
  1,794
  1,910
  2,030
  2,155
Issuance/(repayment) of debt, $m
  410
  361
  410
  456
  503
  549
  595
  639
  683
  725
  767
  807
  848
  887
  927
  966
  1,006
  1,047
  1,089
  1,132
  1,176
  1,222
  1,270
  1,320
  1,373
  1,429
  1,487
  1,548
  1,613
  1,681
  1,753
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  309
  361
  410
  456
  503
  549
  595
  639
  683
  725
  767
  807
  848
  887
  927
  966
  1,006
  1,047
  1,089
  1,132
  1,176
  1,222
  1,270
  1,320
  1,373
  1,429
  1,487
  1,548
  1,613
  1,681
  1,753
Total cash flow (excl. dividends), $m
  325
  481
  542
  604
  671
  742
  817
  896
  979
  1,065
  1,156
  1,249
  1,346
  1,447
  1,552
  1,661
  1,773
  1,890
  2,011
  2,137
  2,267
  2,403
  2,544
  2,691
  2,844
  3,003
  3,169
  3,342
  3,523
  3,711
  3,908
Retained Cash Flow (-), $m
  -137
  -240
  -270
  -301
  -331
  -362
  -392
  -421
  -450
  -478
  -505
  -532
  -558
  -584
  -610
  -636
  -663
  -689
  -717
  -745
  -774
  -805
  -836
  -869
  -904
  -941
  -979
  -1,019
  -1,062
  -1,107
  -1,154
Prev. year cash balance distribution, $m
 
  166
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  407
  272
  304
  340
  380
  425
  475
  529
  588
  651
  718
  788
  863
  942
  1,024
  1,111
  1,201
  1,294
  1,392
  1,493
  1,599
  1,708
  1,822
  1,940
  2,063
  2,190
  2,323
  2,461
  2,605
  2,754
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  391
  249
  264
  280
  295
  309
  321
  331
  338
  341
  341
  336
  328
  316
  301
  282
  261
  238
  214
  190
  165
  142
  119
  99
  80
  64
  50
  38
  28
  21
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company's segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.

FINANCIAL RATIOS  of  Telecom Argentina ADR (TEO)

Valuation Ratios
P/E Ratio 121
Price to Sales 9
Price to Book 24.8
Price to Tangible Book
Price to Cash Flow 42.3
Price to Free Cash Flow 30722.4
Growth Rates
Sales Growth Rate 31.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 30.1%
Cap. Spend. - 3 Yr. Gr. Rate 22%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 44.8%
Total Debt to Equity 60.9%
Interest Coverage 5
Management Effectiveness
Return On Assets 11.8%
Ret/ On Assets - 3 Yr. Avg. 12.7%
Return On Total Capital 15%
Ret/ On T. Cap. - 3 Yr. Avg. 20.3%
Return On Equity 21.7%
Return On Equity - 3 Yr. Avg. 23.8%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 80.9%
Gross Margin - 3 Yr. Avg. 79.9%
EBITDA Margin 25.1%
EBITDA Margin - 3 Yr. Avg. 25.6%
Operating Margin 14.7%
Oper. Margin - 3 Yr. Avg. 15.5%
Pre-Tax Margin 10.5%
Pre-Tax Margin - 3 Yr. Avg. 13.4%
Net Profit Margin 7.4%
Net Profit Margin - 3 Yr. Avg. 8.9%
Effective Tax Rate 28.5%
Eff/ Tax Rate - 3 Yr. Avg. 32%
Payout Ratio 50.4%

TEO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TEO stock intrinsic value calculation we used $3413 million for the last fiscal year's total revenue generated by Telecom Argentina ADR. The default revenue input number comes from 2016 income statement of Telecom Argentina ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TEO stock valuation model: a) initial revenue growth rate of 22.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TEO is calculated based on our internal credit rating of Telecom Argentina ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Telecom Argentina ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TEO stock the variable cost ratio is equal to 84.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TEO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 19.1% for Telecom Argentina ADR.

Corporate tax rate of 27% is the nominal tax rate for Telecom Argentina ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TEO stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TEO are equal to 52.9%.

Life of production assets of 4.5 years is the average useful life of capital assets used in Telecom Argentina ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TEO is equal to -6.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1237 million for Telecom Argentina ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 97.288 million for Telecom Argentina ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Telecom Argentina ADR at the current share price and the inputted number of shares is $3.1 billion.

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Financial statements of TEO
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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