freenet AG
🇩🇪 FNTN.XETRA · Frankfurt · DE000A0Z2ZZ5
Telecom
EUR 26.76 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
11.6
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 26.76 ÷ 2.30 = 11.6
TTM period through: 2025-12-31
Forward P/E (estimated): 11.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 11.7
Yield (Fwd)
7.74%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 7.71%
Net Debt/EBITDA (TTM)
1.5x
Latest quarter: 6.8x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 6.8x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
90.0%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 86.3%
Cash Flow Payout (TTM): 57.7%
FCF Coverage (TTM): 1.55x
ROE
18.2%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
7.2x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
freenet AG is a resilient German telecommunications provider offering highly recurring essential mobile and IPTV services through an asset-light, cash-generative business model. Trading at an attractive P/E of 11.6 with a compelling 7.7% yield, the stock appears undervalued relative to its strong cash generation capabilities, making it worth considering for new positions. The robust free cash flow comfortably covers the recently increased dividend despite broader market saturation.
Sector Context
freenet AG is Germany's largest network-independent telecommunications provider, offering mobile communications, internet, and digital lifestyle services. As an asset-light telecom provider, it operates in an essential services sector characterized by highly recurring, predictable cash flows, making it particularly suitable for dividend strategies as it avoids the heavy capital expenditure burdens of traditional network builders.
Temporary Opportunity Identified
Recent analyst downgrades and market headwinds over slowing subscriber growth (0.8% in Q1) have pressured the stock, creating a valuation discount despite robust free cash flow and a recently raised dividend.
📊 Strategy Analysis
- • Trading at an attractive P/E of 11.63, combined with a high 7.71% dividend yield, offering strong value for an essential service provider.
- • Exceptional cash generation with a Cash Flow Payout of only 57.69% (Dividend Coverage of 1.55x), indicating the dividend is highly secure despite the elevated earnings payout ratio.
- • Strong balance sheet with Net Debt/EBITDA safely reduced to 1.52x, demonstrating prudent deleveraging and excellent financial stability.
- • Asset-light MVNO (Mobile Virtual Network Operator) business model shields the company from the massive capital expenditure cycles typical of traditional network operators.
⚠ What to Watch
- • Top-line revenue has experienced structural stagnation (-3.2% 10-year CAGR), requiring the company to rely on margin expansion and cost controls to grow earnings.
- • Decelerating subscriber growth in a highly saturated German telecom market has triggered recent analyst downgrades.
- • The elevated TTM earnings payout ratio of 85.65% means future dividend growth relies heavily on continued free cash flow stability.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.