A Look At Telstra Group’s Valuation After Strong Results And New A$800 Million 5G Investment

Heightened interest in Telstra Group (ASX:TLS) has been sparked by its recent financial performance, which includes growth in its mobile division, higher income and EBITDA, and an announced A$800 million 5G network investment over four years.

See our latest analysis for Telstra Group.

After a strong 1 year total shareholder return of 23.04%, Telstra’s recent share price performance has cooled, with a 30 day share price return of 2.44% decline and the stock now trading at A$4.80, hinting that momentum may be fading as investors reassess growth and risk.

If Telstra’s recent move has you thinking about other telecom heavyweights, it could be a good moment to scan similar healthcare stocks for more potential ideas.

With Telstra trading at A$4.80 and indicators such as an intrinsic discount of around 16%, the key question is whether the recent pause in momentum hides value or whether the market is already pricing in future growth.

Most Popular Narrative: 2.8% Undervalued

With Telstra Group’s fair value estimate at A$4.94 against a last close of A$4.80, the most followed narrative sees modest upside grounded in cash flow and earnings assumptions.

Strategic focus on cost discipline, digital transformation, and AI-driven automation (including major staff reorganization, migration to a new digital stack, and rollout of AI initiatives) point to further operating leverage and margin improvement as automation scales and legacy cost structures are reduced, potentially supporting higher net margins and earnings. (Impacts: Net margins, EBITDA, earnings growth)

Read the complete narrative.

Curious what sits behind that higher earnings power story? The narrative leans on steady revenue growth, firmer margins, and a future earnings multiple that still steps down from today. Want to see exactly how those pieces combine into that A$4.94 fair value call?

Result: Fair Value of $4.94 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to keep an eye on risks such as rising competition pressuring mobile ARPU and heavy 5G and fibre investment weighing on free cash flow.

Find out about the key risks to this Telstra Group narrative.

Build Your Own Telstra Group Narrative

If you are not fully on board with this view, or you prefer to weigh the numbers yourself, you can shape a custom thesis in just a few minutes: Do it your way.

A great starting point for your Telstra Group research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary 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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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