What is Telecom Italia SpA Financial Strength?
Telecom Italia SpA has the Financial Strength Rank of 4.
Warning Sign:
Telecom Italia SpA displays poor financial strength. Usually, this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its
Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3.
Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Telecom Italia SpA did not have earnings to cover the interest expense.
Telecom Italia SpA's debt to revenue ratio for the quarter that ended in Dec. 2024 was 0.97.
As of today, Telecom Italia SpA's Altman Z-Score is 0.64.
Competitive Comparison of Telecom Italia SpA's Financial Strength
For the Telecom Services subindustry, Telecom Italia SpA's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Telecom Italia SpA's Financial Strength Distribution in the Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, Telecom Italia SpA's Financial Strength distribution charts can be found below:
* The bar in red indicates where Telecom Italia SpA's Financial Strength falls into.
Telecom Italia SpA Financial Strength Calculation
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors
A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Telecom Italia SpA's Interest Expense for the
months ended in Dec. 2024 was $520 Mil. Its Operating Income for the
months ended in Dec. 2024 was $694 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Dec. 2024 was $11,151 Mil.
Telecom Italia SpA's Interest Coverage for the quarter that ended in Dec. 2024 is
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies' interest coverage to be at least 5. Telecom Italia SpA interest coverage is 1.38, which is low.
2. Debt to revenue ratio. The lower, the better.
Telecom Italia SpA's Debt to Revenue Ratio for the quarter that ended in Dec. 2024 is
3. Altman Z-Score.
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Telecom Italia SpA has a Z-score of 0.64, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 0.64 is in distress zone. This implies bankruptcy possibility in the next two years.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Telecom Italia SpA Business Description
Traded in Other Exchanges
Address
Via di Val Cannuta, No. 182, Roma, ITA, 00166
Telecom Italia is the incumbent telecommunications operator in Italy with more than 30% share in the Italian mobile market and 40% share in broadband. In the mobile market, it competes with Vodafone, Wind Tre, and Iliad. After the sale of its fixed network to KKR for EUR 18.8 billion, TIM will become a pure service provider. TIM also has a 20% wireless market share in Brazil and has started building a broadband network in the country, although its reach is very small compared with competitors Telefonica and America Movil.
Telecom Italia SpA Headlines
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