Millicom: A Leaner Telecom Emerges from Restructuring

Tips E-18: A 1-minute summary of my fundamental analysis of Millicom International Cellular S.A. (NASDAQ: TIGO)      

Investment Thesis

Millicom represents a structurally improved Latin American telecom turnaround. Over the past decade, the company delivered a 24.8% CAGR in operating profit despite modest revenue growth. While intrinsic value suggests upside, optimistic assumptions and leverage justify waiting for a deeper margin of safety.

Main Business

Millicom now operates a streamlined, Latin America–only telecom platform. The business spans mobile, fixed broadband, and smaller ancillary services under the Tigo brand, with Colombia and Guatemala contributing roughly half of revenue.

Growth

From 2022–2024, reported revenue grew only 1.6% CAGR, broadly in line with regional telecom growth. Expansion drivers include FTTH rollout, fixed-wireless 5G, postpaid mobile gains, and faster-growing B2B services, though none are likely to materially exceed market growth rates.

Profitability

Margin expansion, rather than topline growth, has driven Millicom’s earnings and return turnaround since 2022. As a result, ROIC rose from 3.1% to 5.2% and ROE more than doubled, suggesting structurally improved economics rather than cyclical uplift.

Financial Strength

Operational cash generation is solid, but high leverage and aggressive reinvestment weaken overall financial resilience. Debt-to-equity remains elevated at 213%, and volatile tax outcomes add uncertainty to long-term capital allocation discipline. 

Peer Performance

Millicom stands out among Latin American peers for margin expansion, return improvement, and free cash flow momentum.

Valuation

Shares appear undervalued. However, assumptions on margins, returns, and tax stability remain aggressive, supporting patience until prices fall further. 

For more insights and valuation details, refer to the original article on Seeking Alpha titled 

Millicom's Quiet Comeback

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PS: If you are in Malaysia or Singapore, the e-book can only be download from Kobo and Google Play. 

Disclaimer & Disclosure

I am not an investment adviser, security analyst, or stockbroker.  The contents are meant for educational purposes and should not be taken as any recommendation to purchase or dispose of shares in the featured companies.   Investments or strategies mentioned on this website may not be suitable for you and you should have your own independent decision regarding them. 

The opinions expressed here are based on information I consider reliable but I do not warrant its completeness or accuracy and should not be relied on as such. 

I may have equity interests in some of the companies featured.

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