Cellcom Story

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CEL -- USA Stock  

USD 3.81  0.09  2.42%

Cellcom Israel is scheduled to announce its earnings today. Cellcom Israel Asset Turnover is relatively stable at the moment as compared to the past year. The company's current value of Asset Turnover is estimated at 0.59. Current Ratio is expected to hike to 1.66 this year, although the value of Earnings before Tax will most likely fall to (133.4 M). While some of us are becoming more enthusiastic about communication services space, let's summarize Cellcom Israel in greater detail to make a better estimate of its debt utilization.
Published over a month ago
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Continue to hold Cellcom (NYSE:CEL) based on its current debt obligations?
The entity has 956.5 M in debt with debt to equity (D/E) ratio of 2.04, meaning that Cellcom Israel heavily relies on borrowing funds for operations. The firm has a current ratio of 1.59, which is typical for the industry and considered as normal. We provide trade advice to complement the prevailing expert consensus on Cellcom Israel. Our dynamic recommendation engine uses a multidimensional algorithm to analyze the company's potential to grow using all technical and fundamental data available at the time.
Cellcom Israel financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Cellcom Israel, including all of Cellcom Israel's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Cellcom Israel assets, the company is considered highly leveraged. Understanding the composition and structure of overall Cellcom Israel debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Cellcom Total Liabilities

Cellcom Israel liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Cellcom Israel has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Cellcom Israel balance sheet include debt obligations and money owed to different Cellcom Israel vendors, workers, and loan providers. Below is the chart of Cellcom short long-term liabilities accounts currently reported on its balance sheet.
You can use Cellcom Israel financial leverage analysis tool to get a better grip on understanding its financial position

How important is Cellcom Israel's Liquidity

Cellcom Israel financial leverage refers to using borrowed capital as a funding source to finance Cellcom Israel ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cellcom Israel financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Cellcom Israel's total debt and its cash.

Is Cellcom Israel valued accurately by the market?

Cellcom Israel reported the last year's revenue of 1.03 B. Reported Net Loss for the year was (4.94 M) with profit before taxes, overhead, and interest of 983 M.

Asset Breakdown

Assets Non Current
1.4 B
2.7 B
Current Assets
Total Assets6.74 Billion
Current Assets2.72 Billion
Assets Non Current4.02 Billion
Goodwill1.4 Billion
Tax Assets3.08 Million

Some Cellcom technical indicators suggest turnaround

The semi deviation is down to 2.38 as of today. Cellcom Israel currently demonstrates below-verage downside deviation. It has Information Ratio of 0.04 and Jensen Alpha of 0.34. However, we do advice investors to further question Cellcom Israel expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Conclusion on Cellcom Israel

While many of the other players under the telecom services industry are still a bit expensive, Cellcom Israel may offer a potential longer-term growth to stakeholders. The bottom line, as of the 17th of August 2020, our analysis shows that Cellcom Israel moves indifferently to market moves. The company is overvalued and projects below average probability of distress for the next 2 years. Our overall 30 days buy-hold-sell advice on the company is Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Cellcom Israel. Please refer to our Terms of Use for any information regarding our disclosure principles.

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