Long-established in the Telecommunication Services industry, Grupo Televisa SAB (TV, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a decline of 0.25%, juxtaposed with a three-month change of -23.28%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Grupo Televisa SAB.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 4/10
- 2. Profitability rank: 6/10
- 3. Growth rank: 2/10
- 4. GF Value rank: 4/10
- 5. Momentum rank: 7/10
Based on the above method, GuruFocus assigned Grupo Televisa SAB the GF Score of 67 out of 100, which signals poor future outperformance potential.
Snapshot of Grupo Televisa SAB's Business
Grupo Televisa SAB, with a market cap of $2.24 billion and sales of $4.02 billion, is one of the leading telecommunication firms in Mexico. The company's operating margin stands at 5.52%. Televisa's cable arm, Izzi, holds networks that pass 19 million Mexican homes and provide broadband service to 6 million customers. The firm is also one of the largest pay-television providers in Mexico, with more than 4 million customers. Televisa holds a majority stake in Sky Mexico, the country's only satellite TV provider, serving about 6 million customers. Televisa holds interests in several smaller businesses, including terrestrial radio, magazine publishing, Mexico bingo parlors, and three of Mexico's professional soccer teams. It plans to spin these businesses off in the near future. After merging its traditional media business into Univision, Televisa owns a 45% stake in combined entity TelevisaUnivision.
Financial Strength Breakdown
Grupo Televisa SAB's financial strength indicators present some concerning insights about the company's balance sheet health. The company's interest coverage ratio of 0.57 positions it worse than 92.03% of 301 companies in the Telecommunication Services industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. The company's Altman Z-Score is just 1.11, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.38 indicates a struggle in handling existing debt levels. Furthermore, the company's debt-to-Ebitda ratio is 31.21, which is above Joel Tillinghast's warning level of 4 and is worse than 96.5% of 314 companies in the Telecommunication Services industry.
Growth Prospects
A lack of significant growth is another area where Grupo Televisa SAB seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -10.7 per year over the past three years, which underperforms worse than 85.79% of 380 companies in the Telecommunication Services industry. Over the past five years, Grupo Televisa SAB has witnessed a decline in its earnings before interest, taxes, depreciation, and amortization (EBITDA). The three-year growth rate is recorded at -23.8, while the five-year growth rate is at -14.1. Lastly, Grupo Televisa SAB predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Given Grupo Televisa SAB's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While the company has a rich history and a significant presence in the Telecommunication Services industry, its current financial and growth indicators suggest that it may struggle to maintain its past performance. Therefore, investors should exercise caution and conduct thorough research before making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
