Telus Corporation (TU) delivered upbeat Q3 results as the company won business with both new and existing clients. It also achieved solid organic growth and demonstrated momentum on AI-focused acquisitions completed over the past 12 months. TU shares rose 2.33% to close at $23.25 on November 5.
Telus Corporation is a telecommunication company that designs and provides a wide range of telecommunication products and services in Canada. It offers wireless, wireline, and internet communication services for voice and data. (See Insiders’ Hot Stocks on TipRanks)
Q3 Results
Revenue in Q3 was up 30% year-over-year to $556 million, with an organic business growth of 14% or $58 million. The increase was mostly driven by growth in services provided to existing and new clients. Telus also achieved growth from prior customer acquisitions of 16% or $71 million.
Adjusted EBITDA grew 23% year-over-year to $137 million, with adjusted EBITDA margin coming in at 24.6%, driven by revenue growth. Consequently, the company posted adjusted diluted EPS of $0.26, up 13% year-over-year.
Full-Year Outlook
According to CFO Vanessa Kanu, Telus has a good level of liquidity, low borrowing costs, and improving leverage ratio. For the full year, management expects revenue of between $2.17 billion and $2.21 billion, implying growth between 37% and 40%.
Adjusted EBITDA is expected to range between $530 and $540 million, implying 36% to 38% growth. Management expects adjusted diluted EPS of between $0.92 and $0.97, implying 30% to 37% growth.
Stock Ratings
Last month, Canaccord Genuity analyst Aravinda Galappatthige reiterated a Buy rating on the stock and price target of $25.71, implying 9.8% upside potential to current levels.
Consensus among analysts is a Strong Buy based on six Buys. The average Telus Corporation price target of $27.70 implies 18.3% upside potential to current levels.
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