Tencent Holdings returned losses of -8.9% over the last year, with its stock price reaching a high of $53.27 and a low of $24.73. Over the same period, the stock underperformed the S&P 500 index by -9.0%. As of April 2023, the company's 50-day average price was $45.62. Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. Based in Shenzhen, China, the Large-Cap Communication Services company has 108,436 full time employees. Tencent Holdings has offered a 4.8% dividend yield over the last 12 months.
Increasing Revenues but Narrowing Margins:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $377,289 | $482,064 | $560,118 | $554,552 |
| Gross Margins | 44.4% | 46.0% | 43.9% | 43.0% |
| Operating Margins | 25.6% | 26.6% | 22.2% | 20.6% |
| Net Margins | 24.73% | 33.16% | 40.14% | 33.95% |
| Net Income (MM) | $93,310 | $159,847 | $224,822 | $188,243 |
| Net Interest Income | -$1,376,000 | -$492,000 | -$1,268,000 | -$1,393,000 |
| Depreciation & Amort. | -$44,673,000 | -$50,774,000 | -$57,670,000 | -$61,216,000 |
| Earnings Per Share | $9.64 | $16.52 | $23.16 | $2.74 |
| EPS Growth | n/a | 71.37% | 40.19% | -88.17% |
| Diluted Shares (MM) | 9,603 | 9,650 | 9,696 | 9,561 |
| Free Cash Flow (MM) | $91,602 | $127,520 | $113,021 | $95,241 |
| Capital Expenditures (MM) | -$56,988 | -$66,599 | -$62,165 | -$50,850 |
| Net Current Assets (MM) | -$211,194 | -$237,735 | -$250,859 | -$229,282 |
| Current Ratio | 1.06 | 1.18 | 1.2 | 1.3 |
| Long Term Debt | $187,584,000 | $234,202,000 | $282,526,000 | $312,337,000 |
| Net Debt / EBITDA | 0.6 | 0.43 | 0.46 | 0.68 |
Tencent Holdings Has Attractive Multiples and Trades Below Its Graham Number:
Tencent Holdings has a trailing twelve month P/E ratio of 16.6, compared to an average of 18.85 for the Communication Services sector. Based on its EPS guidance of $2.54, the company has a forward P/E ratio of 18.0. The -23.4% compound average growth rate of Tencent Holdings's historical and projected earnings per share yields a PEG ratio of -0.71. This indicates that its shares are overvalued.In contrast, the market is likely undervaluing Tencent Holdings in terms of its equity because its P/B ratio is 0.57 while the sector average is 3.12. The company's shares are currently trading -70.7% below their Graham number.
Overview of Tencent Holdings's Market Factors:
The largest shareholder is Pacer Advisors, Inc., whose 0% stake in the company is worth $53,626.
