Telus Corp (TU)
Valuation Overview•Is Telus Corp Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Fragile underlying quality score of 38/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
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Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This outlook is strongly supported by highly attractive capital returns, anchored by a strong, well-covered dividend yield.
TU struggles with subpar profitability and pressured margins. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 13.1%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $4.9B | +1.8% | +3.9% | +6.0% | +5.1% | |
| EBITDA | $1.8B | — | +0.1% | — | — | |
| Net Income | -$1.8B | +12.1% | -11.7% | — | -2.1% | |
| EPS (Diluted) | $-1.17 | +7.5% | -14.5% | -5.2% | -4.6% | |
| Free Cash Flow | $690.0M | +61.0% | +26.4% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 41.9% | 52.7% | 55.9% | 56.3% |
| Operating Margin | 13.1% | 12.4% | 14.3% | 16.5% |
| Net Margin | -4.5% | 4.9% | 6.6% | 8.5% |
| FCF Margin | 9.9% | 8.4% | 5.2% | 3.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q3'26Latest | $0.14 | $0.12 | -15.0% | ||
| Q2'26 | $0.16 | $0.17 | +8.7% | ||
| Q1'26 | $0.18 | $0.15 | -16.7% | ||
| Q4'25 | $0.19 | $0.17 | -10.5% | ||
| Q3'25 | $0.17 | $0.16 | -5.9% | ||
| Q2'25 | $0.15 | $0.18 | +20.0% | ||
| Q1'25 | $0.15 | $0.18 | +20.0% | ||
| Q1'25 | $0.16 | $0.18 | +12.5% |
Total return is -39.4% (1Y), lagging the benchmark by -55.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -29.3% | -41.6% | — |
| 1Y | -39.4% | -55.5% | +6.6% |
| 3YCAGR | -11.1% | -32.2% | +19.8% |
| 5YCAGR | -9.2% | -20.9% | +24.0% |
| 10YCAGR | +1.2% | -12.5% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Telus Corp (TU) valuation, health, and returns.
Telus Corp is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +128.9% upside to DCF intrinsic value of $20.03)
Telus Corp has multiple valuation anchors: DCF Intrinsic Value: $20.03 | Peer Relative Fair Value: $11.80 | Wall Street Analyst Target: $11.00 (implying +29.1% upside). A convergence of these signals offers higher conviction.
Telus Corp displays weak financial health with a composite quality score of 38/100, supported by a Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 3.9%.
Telus Corp pays a 8.8% dividend yield, covered by a 146% payout ratio with 5 years of growth, supplemented by a 0.2% buyback yield.
Telus Corp's current growth trajectory is Decelerating. The company achieved +1.8% 1Y revenue growth and +7.5% 1Y EPS growth, compared to its 3Y revenue CAGR of +3.9%.
Wall Street consensus is Buy based on 23 analysts, beating EPS expectations in 67% of recent quarters with a -1-quarter streak. The consensus price target represents a +29.1% change from current levels.
Investment risks for Telus Corp include: -45.0% 1-year max drawdown, stretched payout ratio. Volatility risk is characterized by a beta of 0.05x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.