Deutsche Telekom AG

Deutsche Telekom maintains a capital structure with a debt-to-equity ratio of 2.45, indicating a significant reliance on debt financing. The company's liquidity position is moderate, with a current ratio of 1.11 and cash and equivalents of EUR 10.83 billion, which is insufficient to cover its long-term debt of EUR 145.15 billion. Free cash flow of EUR 4.14 billion supports operational flexibility, but the net cash position is negative after subtracting total debt.

Profitability metrics show a return on equity of 3.35% and a return on assets of 0.67%, both below the industry median for integrated telecommunications services. The operating margin of 20.35% (calculated from operating income of EUR 5.69 billion and revenue of EUR 27.94 billion) is in line with the sector average, but the net profit margin of 7.09% (net income of EUR 1.98 billion) is below the median for the industry.

The company's revenue is concentrated in its domestic market, with Germany accounting for over 60% of total revenue. International operations, particularly in Central and Eastern Europe, contribute to diversification but remain exposed to regulatory and macroeconomic risks. No material revenue is derived from a single customer or product line, reducing concentration risk.

Outlook for the current fiscal year indicates a revenue growth of 2.5% year-over-year, driven by 5G expansion and digital services. For the next fiscal year, revenue is projected to grow by 3.0%, supported by continued investment in fiber infrastructure and enterprise solutions. Capital expenditures are expected to remain elevated at EUR 4.72 billion, reflecting ongoing network modernization efforts.

Risk factors include high leverage, with long-term debt exceeding total equity by 145%, and exposure to regulatory changes in the telecommunications sector. The company's liquidity risk is moderate, but its debt-to-equity ratio suggests potential refinancing challenges in a rising interest rate environment. Dilution risk is low, with no near-term pressure from share issuance or convertible debt.

Recent filings and transcripts highlight strategic priorities in 5G deployment and digital transformation. The company has also emphasized cost optimization and operational efficiency in its investor communications.

Cash conversion ratio of 4.85 places the company in the top quartile, indicating strong cash generation efficiency.

Net income CAGR of 23.2% over four years highlights robust historical earnings growth trajectory for the firm.

Analyst consensus recommends a buy with a mean price target of 38.13, reflecting positive market sentiment.

Free cash flow reached 13.2 billion euros in 2026, providing substantial liquidity for strategic investments or dividends.

Debt-to-equity ratio of 2.45 sits in the bottom quartile, signaling significantly higher leverage risk than peers.

High credit risk flag indicates potential concerns regarding the company's ability to meet its financial obligations.

Return on equity of 3.35% trails the 4.76% industry median, suggesting less efficient use of shareholder capital.

Revenue €31.72B, +2,5% YoY; Operating income −36,4% YoY.

• ▍Revenue €31.72B, +2,5% YoY
• ▍Operating income −36,4% YoY
• ▍Net income −58,8% YoY
• ▍Free cash flow −45,7% YoY
• ▍Net margin 5.4%

Revenue €28.93B, +1,5% YoY; Operating income −1,8% YoY.

• ▍Revenue €28.93B, +1,5% YoY
• ▍Operating income −1,8% YoY
• ▍Net income −17,9% YoY
• ▍Free cash flow −7,9% YoY
• ▍Net margin 8.4%

Revenue €28.67B, +1,0% YoY; Operating income +11,1% YoY.

• ▍Revenue €28.67B, +1,0% YoY
• ▍Operating income +11,1% YoY
• ▍Net income +25,2% YoY
• ▍Free cash flow −89,6% YoY
• ▍Net margin 9.1%

Revenue €29.75B, +6,5% YoY; Operating income +19,0% YoY.

• ▍Revenue €29.75B, +6,5% YoY
• ▍Operating income +19,0% YoY
• ▍Net income +43,5% YoY
• ▍Free cash flow +30,8% YoY
• ▍Net margin 9.6%

Revenue €30.93B; Operating income €8.47B.

• ▍Revenue €30.93B
• ▍Operating income €8.47B
• ▍Net margin 13.5%

Revenue €28.50B; Operating income €6.14B.

• ▍Revenue €28.50B
• ▍Operating income €6.14B
• ▍Net margin 10.4%

Revenue €28.39B; Operating income €5.98B.

• ▍Revenue €28.39B
• ▍Operating income €5.98B
• ▍Net margin 7.4%

Revenue €27.94B; Operating income €5.69B.

• ▍Revenue €27.94B
• ▍Operating income €5.69B
• ▍Net margin 7.1%

Revenue €119.08B, +2,9% YoY; Operating income −5,5% YoY.

• ▍Revenue €119.08B, +2,9% YoY
• ▍Operating income −5,5% YoY
• ▍Net income −14,3% YoY
• ▍Free cash flow −21,6% YoY
• ▍Net margin 8.1%

Revenue €115.77B, +3,4% YoY; Operating income +26,3% YoY.

• ▍Revenue €115.77B, +3,4% YoY
• ▍Operating income +26,3% YoY
• ▍Net income −37,0% YoY
• ▍Free cash flow +65,4% YoY
• ▍Net margin 9.7%

Revenue €111.97B, −1,9% YoY; Operating income +34,9% YoY.

• ▍Revenue €111.97B, −1,9% YoY
• ▍Operating income +34,9% YoY
• ▍Net income +122,3% YoY
• ▍Free cash flow +23,7% YoY
• ▍Net margin 15.9%

Revenue €114.20B, +6,1% YoY; Operating income +22,6% YoY.

• ▍Revenue €114.20B, +6,1% YoY
• ▍Operating income +22,6% YoY
• ▍Net income +91,6% YoY
• ▍Free cash flow +129,2% YoY
• ▍Net margin 7.0%