Why Investors Shouldn't Be Surprised By Desktop S.A.'s (BVMF:DESK3) P/E
May 28
Brazilian (BOVESPA) Telecom Sector Analysis
UpdatedMay 30, 2024
DataAggregated Company Financials
Companies13
- 7D-1.8%
- 3M-14.1%
- 1Y12.5%
- YTD-11.5%
Over the last 7 days, the Telecom industry has dropped 1.5%, driven by a pullback from Telefônica Brasil of 1.6%. In contrast, Desktop has gained 20%. This takes the industry's 12 month performance to a gain of 15%. Earnings are forecast to grow by 16% annually.
Sector Valuation and Performance
Has the Brazilian Telecom Sector valuation changed over the past few years?
| Date | Market Cap | Revenue | Earnings | PE | Absolute PE | PS |
|---|---|---|---|---|---|---|
| Thu, 30 May 2024 | R$125.8b | R$84.4b | R$8.5b | 13.4x | 14.9x | 1.5x |
| Sat, 27 Apr 2024 | R$132.2b | R$83.1b | R$8.3b | 14.8x | 15.9x | 1.6x |
| Mon, 25 Mar 2024 | R$140.9b | R$83.0b | R$8.3b | 13.6x | 17x | 1.7x |
| Wed, 21 Feb 2024 | R$140.4b | R$81.7b | R$7.7b | 15x | 18.1x | 1.7x |
| Fri, 19 Jan 2024 | R$136.5b | R$81.3b | R$7.2b | 16.9x | 19x | 1.7x |
| Sun, 17 Dec 2023 | R$145.5b | R$81.3b | R$7.2b | 19.1x | 20.3x | 1.8x |
| Tue, 14 Nov 2023 | R$136.3b | R$81.1b | R$7.3b | 18.3x | 18.8x | 1.7x |
| Thu, 12 Oct 2023 | R$124.1b | R$79.8b | R$6.9b | 19.8x | 17.9x | 1.6x |
| Sat, 09 Sep 2023 | R$115.2b | R$79.8b | R$6.9b | 18.9x | 16.6x | 1.4x |
| Mon, 07 Aug 2023 | R$116.8b | R$79.6b | R$6.8b | 17.3x | 17.2x | 1.5x |
| Wed, 05 Jul 2023 | R$116.8b | R$78.2b | R$6.1b | 17.1x | 19.2x | 1.5x |
| Fri, 02 Jun 2023 | R$110.1b | R$78.2b | R$6.1b | 16.2x | 18.1x | 1.4x |
| Sun, 30 Apr 2023 | R$111.3b | R$75.6b | R$5.9b | 18.1x | 19x | 1.5x |
| Tue, 28 Mar 2023 | R$105.1b | R$75.6b | R$5.8b | 14.1x | 18x | 1.4x |
| Thu, 23 Feb 2023 | R$104.6b | R$75.2b | R$5.7b | 15.3x | 18.3x | 1.4x |
| Sat, 21 Jan 2023 | R$102.7b | R$72.9b | R$7.8b | 13.1x | 13.2x | 1.4x |
| Mon, 19 Dec 2022 | R$99.3b | R$72.9b | R$7.8b | 13.8x | 12.7x | 1.4x |
| Wed, 16 Nov 2022 | R$109.5b | R$72.8b | R$7.7b | 15.3x | 14.2x | 1.5x |
| Fri, 14 Oct 2022 | R$106.0b | R$69.9b | R$8.1b | 13x | 13.1x | 1.5x |
| Sun, 11 Sep 2022 | R$112.3b | R$69.9b | R$8.1b | 14.4x | 13.9x | 1.6x |
| Tue, 09 Aug 2022 | R$118.8b | R$69.1b | R$8.1b | 14.8x | 14.6x | 1.7x |
| Thu, 07 Jul 2022 | R$120.6b | R$67.0b | R$9.1b | 13x | 13.2x | 1.8x |
| Sat, 04 Jun 2022 | R$128.3b | R$66.7b | R$9.1b | 15.9x | 14.1x | 1.9x |
| Mon, 02 May 2022 | R$136.0b | R$65.7b | R$9.1b | 17x | 15x | 2.1x |
| Wed, 30 Mar 2022 | R$141.3b | R$65.7b | R$9.1b | 23.1x | 15.5x | 2.2x |
| Fri, 25 Feb 2022 | R$133.6b | R$65.1b | R$9.1b | 24.4x | 14.7x | 2.1x |
| Sun, 23 Jan 2022 | R$130.9b | R$64.8b | R$7.7b | 26.5x | 16.9x | 2x |
| Tue, 21 Dec 2021 | R$132.6b | R$64.8b | R$7.7b | 25.8x | 17.1x | 2x |
| Thu, 18 Nov 2021 | R$135.0b | R$64.5b | R$7.8b | 28.6x | 17.4x | 2.1x |
| Sat, 16 Oct 2021 | R$139.2b | R$73.0b | R$2.9b | 38.6x | 48.4x | 1.9x |
| Mon, 13 Sep 2021 | R$136.4b | R$73.0b | R$2.9b | 42.7x | 47.5x | 1.9x |
| Wed, 11 Aug 2021 | R$139.5b | R$73.0b | R$2.9b | 49.2x | 48.6x | 1.9x |
| Sun, 06 Jun 2021 | R$134.5b | R$71.1b | -R$2,137,569,000.00 | 48.7x | -62.9x | 1.9x |
Price to Earnings Ratio
-62.9x
Current Industry PE
- Investors are pessimistic on the Brazilian Communication Services industry, indicating that they anticipate long term growth rates will be lower than they have historically.
- The industry is trading at a PE ratio of 15.0x which is lower than its 3-year average PE of 18.0x.
- The 3-year average PS ratio of 1.7x is higher than the industry's current PS ratio of 1.5x.
Past Earnings Growth
- Total earnings for the Communication Services industry have gone up over the last three years, and the industry is now profitable. Revenues have grown 5.9% per year.
- This means that more sales are being generated by the industry overall, and subsequently profits are increasing too.
Industry Trends
Which industries have driven the changes within the Brazilian Telecom sector?
| BR Market | -1.50% | |
| Telecom | -1.85% | |
| Interactive Media and Services | 0.80% | |
| Entertainment | -0.64% | |
| Media | -1.36% | |
| Wireless Telecom | -1.39% | |
| Telecom Services and Carriers | -2.14% | |
Industry PE
- Investors are most optimistic about the Media industry which is trading above its 3-year average PE ratio.
- Analysts are expecting annual earnings growth of 35.8%, which is lower than the prior year's growth of 338.2% per year.
Forecasted Growth
- Analysts are most optimistic on the Interactive Media and Services industry, expecting annual earnings growth of 58% over the next 5 years.
- In contrast, the Wireless Telecom industry is expected to see its earnings grow by 14% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?
| Company | Last Price | 7D | 1Y | Valuation | |
|---|---|---|---|---|---|
| DESK3 Desktop | R$16.34 | 19.7% +R$310.2m | 67.2% | PE18.3x | |
| ENJU3 Enjoei | R$2.67 | 2.7% +R$14.2m | 107.0% | PS2.5x | |
| DOTZ3 Dotz | R$8.30 | 0.1% +R$2.0m | -13.5% | PS0.8x |
