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SoftBank Corp 9434

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Stock XTKS Rating as of
¥‎187.20 −4.10 (2.14%)
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As of Delayed Price Closed

Company Report

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SoftBank Mobile Growth Recovering, With AI Spending To Come

Dan Baker

Given its higher financial leverage and high dividend payout ratio, SoftBank is the most leveraged way for investors to invest in the Japanese telecom market. If the Japanese mobile market can return to the cozy, stable oligopoly status that it has enjoyed for much of its history, SoftBank would likely provide investors with the highest returns of the large listed telecom companies. However, we have saw several bouts of telecom price competition over 2020 and 2021 where SoftBank’s financial leverage has worked to lower its profits more quickly than the other operators. We can't rule out further pricing pressure in the core telecom market but Rakuten's financial position might make it difficult for the company to start any more price wars.

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Price vs Fair Value

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9434 is trading at a 527% premium.
Price
¥‎191.30
Fair Value
¥‎964.00
Uncertainty
Low
1-Star Price
¥‎399.80
5-Star Price
¥‎865.50
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

A 85% dividend payout ratio provides SoftBank with a strong dividend yield in a Japanese market with generally low yields.

Bears

Pricing pressure in the telecom market looks set to increase through Government efforts to lower prices, Rakuten’s entry into the market, and lack of differentiation between operators' core product offerings.

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Trading Information

Previous Close Price
¥‎191.30
Day Range
¥‎186.30–190.90
52-Week Range
¥‎165.15–210.50
Bid/Ask
¥‎186.70 / ¥‎187.30
Market Cap
¥‎8.85 Tril
Volume/Avg
101.4 Mil / 72.2 Mil

Key Statistics

Price/Earnings (Normalized)
1.89
Price/Sales
1.50
Dividend Yield (Trailing)
4.50%
Dividend Yield (Forward)
4.50%
Total Yield
4.50%

Company Profile

SoftBank Corp, or SoftBank, is an established, telecommunications services provider in Japan owning a mobile network with around 50 million mobile customers and 24% market share. It also provides some fixed line services, which are mostly resold so are low margin. The company also owns 32.4% of LY Corp, and SoftBank and LY Corp each own 32% of PayPay so SoftBank consolidates PayPay. SoftBank Group sold 33.5% of the SoftBank Corp in an IPO in 2018 and sold down further to a 42% holding in 2020.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Core
Total Number of Employees
79,341
Website
https://www.softbank.jp

Competitors

Valuation

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Metric
9434
9433
Price/Earnings (Normalized)
 1.8915.92
Price/Book Value
 3.791.89
Price/Sales
 1.501.72
Price/Cash Flow
 6.727.35
Price/Earnings
9434
9433

Financial Strength

Metric
9434
9433
Quick Ratio
 0.690.67
Current Ratio
 0.740.71
Interest Coverage
 13.9196.04
Quick Ratio
9434
9433

Profitability

Metric
9434
9433
Return on Assets (Normalized)
 4.10%5.13%
Return on Equity (Normalized)
 26.96%12.78%
Return on Invested Capital (Normalized)
 6.45%8.34%
Return on Assets
9434
9433

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