NTT (Nippon Telegraph & Telephone) (9432) Earnings: 1Q Operating Income Falls Short of Estimates Amid Modest Revenue Miss

NTT (Nippon Telegraph & Telephone) on Smartkarma

Recent analyst coverage on NTT (Nippon Telegraph & Telephone) by independent analyst Rahul Jain on Smartkarma sheds light on the company’s performance. In his report titled “NTT Corp (9432): IT Growth Shines, Full Data Buyout, But Buybacks Over Debt Raise Concerns,” Jain highlights a mixed picture for NTT. Despite a notable revenue increase over the past 5 years, NTT’s profit took a hit in FY24, dropping by 21.8% year-over-year. Notably, the focus on IT services has been driving growth, with IT services profit showing a strong 20.2% compound annual growth rate and contributing significantly to group EBITDA. The full buyout of NTT DATA at 20x earnings reflects the company’s strategic direction.

However, concerns arise regarding NTT’s capital allocation strategy. Despite the rising debt levels, buybacks totaling ¥1.8T have raised questions about the company’s prioritization between enhancing earnings per share (EPS) and maintaining a robust long-term balance sheet. Jain’s bearish sentiment suggests caution, as NTT navigates through a period of growth and financial intricacies that require a balanced approach to ensure sustainable performance in the long run.

A look at NTT (Nippon Telegraph & Telephone) Smart Scores

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

NTT (Nippon Telegraph & Telephone) is poised for a steady long-term outlook according to Smartkarma Smart Scores. The company scores well in key areas, with high marks in dividend and momentum. This indicates NTT’s commitment to rewarding shareholders and its ability to maintain positive market trends. Additionally, NTT shows resilience, suggesting stability even in challenging situations. While growth and value scores are slightly lower, the overall outlook suggests a balanced approach towards sustained performance.

Nippon Telegraph & Telephone Corporation, a prominent provider of telecommunications services in Japan, offers a mix of communication solutions including telephone, data services, and equipment sales. With a solid foundation in both local and long-distance telephone services, NTT demonstrates a diverse portfolio catering to various communication needs. The Smartkarma Smart Scores for NTT reflect a company focused on delivering consistent dividends, maintaining market momentum, and exhibiting resilience in the face of uncertainties, positioning itself for a favorable long-term trajectory.

Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
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