Deutsche Telekom AG (DTEGY)
UndervaluedFundamental
74
Price
$26.11
Market Cap
$128.60B
Part 1 · What the company is worth
Overview
Deutsche Telekom owns and operates telecommunications networks — mobile, fixed-line and broadband — in Germany and across Europe, and holds a majority stake in T-Mobile US, the American mobile carrier. Customers pay recurring fees for voice, data and broadband access, plans that typically run for one or two years, and its Systems Solutions unit sells IT and digital services to businesses and public administrations.
How it makes money
Most revenue is recurring subscription fees for network access, billed monthly regardless of how much a customer actually uses. Building and upgrading the underlying networks — spectrum, fibre, towers — requires continuous heavy capital spending, so profitability depends on spreading that fixed cost over as many paying subscribers as possible; the U.S. business, T-Mobile, is now the largest single contributor to group revenue.
Revenue by segment
The majority-owned American mobile carrier, now the largest single source of group revenue and profit.
The domestic mobile, fixed-line and broadband business, including the Deutsche Telekom brand's home market.
Mobile and fixed-line operations in other European countries outside Germany.
IT, cloud and digital services sold to business and public-sector customers, separate from the network businesses.
Competitive moat
Scale · NarrowOwning nationwide spectrum licences and physical network infrastructure is expensive enough to keep out most new entrants, and customers rarely switch carriers over small price differences once installed. But the advantage is not exclusive: a handful of well-capitalized rivals own comparable networks in every market Deutsche Telekom serves, so competition still pressures prices.
What drives demand
DefensiveMobile and broadband access are close to essential services for most households and businesses, so subscriber numbers hold up reasonably well even in a weaker economy. Growth instead comes mainly from price increases, added services and subscriber gains in the U.S. market rather than from the economic cycle.
Key risks
- Intense competition in the U.S. market — T-Mobile US operates in a market the company describes as intensively competitive, with potential saturation of wireless customer growth and increasing convergence among mobile, fixed-network and satellite providers.
- Data privacy and cybersecurity — The company ranks data privacy and security as its highest-significance operational risk, citing GDPR exposure with potential fines of up to 2-4% of total worldwide annual revenue alongside evolving cyber threats.
- German and European market competition — Intensifying competition and uncertain economic conditions across consumer, business and wholesale segments in Germany have raised this risk from low to medium significance.
- Procurement and supplier disruption — The company raised this risk from medium to high significance, citing geopolitical disruption, component shortages, supplier concentration and the pass-through cost of U.S. tariffs.
The case for
Buyers argue that T-Mobile US's continued subscriber and service-revenue growth makes it the group's main value driver, that owning irreplaceable network infrastructure across Germany, Europe and the U.S. gives durable pricing power, and that steady, recurring subscription revenue supports the dividend even through economic downturns.
The case against
Sellers fear that group results now depend heavily on a single foreign subsidiary exposed to U.S.-specific competitive and regulatory swings, that intensifying competition in both Germany and the U.S. will keep pressuring prices, and that heavy ongoing network investment leaves less room for error if growth in any one market slows.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 18, 2026 with claude-haiku-4-5 — shared with all users
Vodafone is the number-two mobile and cable-broadband operator in Germany and sells to the same households and business customers as Telekom across several other European markets.
Verizon is one of the two main rivals of T-Mobile US, the subsidiary that generates most of Deutsche Telekom's revenue, competing for the same American wireless and home-internet subscribers.
AT&T fights T-Mobile US for the same US postpaid mobile and fibre customers, the market that now drives the bulk of Deutsche Telekom's group revenue.
Through its O2 brand Telefónica runs the third German mobile network and competes directly for German consumer mobile and fixed-line subscriptions, as well as in Spain and Latin America.
1&1 is building Germany's fourth mobile network and undercuts Telekom on price for mobile and DSL/fibre contracts sold to German residential customers.
Orange is the other large integrated European incumbent, competing with Telekom for mobile, broadband and corporate ICT customers across continental Europe.
Balance Sheet & Liquidity
Revenue
$119.69B
Trailing 12 months (through 6/30/2026)
Net Income
$8.64B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$17.39B
Total Equity
$59.85B
Total Liabilities
$146.76B
Current Ratio
1.03
Interest Coverage
-
Debt/EBITDA
3.44
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$60.17
Current Price
$26.11
Margin of Safety
+56.6%
Fair Value Range
$39.11 - $81.23
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
15.11
ROE
15.1%
P/B Ratio
2.15
P/FCF
7.39
Gross Margin
44.9%
ROIC
11.1%
Profitability Radar
Value Creation (Economic Moat)
ROIC
11.1%
WACC
3.7%
ROIC − WACC
+7.4 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (15)
- Price CAGR 5.20%
- ROIC 11.1%
- Gross Margin 44.9%
- P/FCF 7.39
- P/B Ratio 2.15
- Debt/Equity ratio
- Positive Free Cash Flow
- Current Ratio
- Debt/EBITDA
- DCF valuation (Undervalued)
- ROE 14.0%
- Analyst Consensus 92% Buy
- Earnings Surprise avg 8.0%
- PEG Ratio 0.84
- Earnings Quality (OCF/NI) 4.25
Failed (4)
- CapEx intensity
- Revenue Growth 5Y 3.4%
- Net Margin Trend 8.1% vs 9.7%
- Piotroski F-Score 2/9
Unavailable (8)
- EPS data insufficient
- Dividend Payout NaN%
- Operating Margin NaN%
- Interest Coverage
- Return on Tangible Assets
- Low reliance on intangibles
- Price below Graham Number
- Share Dilution (missing shares data)
Piotroski F-Score
Serious financial concerns
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Timotheus Hottges | Chairman of Management Board & CEO | 63 |
| Dr. Christian P. Illek | CFO & Product and Technology & Member of Management Board | 61 |
| Dr. Ferri Abolhassan Pur-Moghaddam | Member of the Executive Board | 61 |
| Mr. Thorsten Langheim | Member of Management Board & Executive VP of Group Corporate Development and USA | 59 |
| Ms. Birgit M. Bohle | Member of Mgt Board,Chief HR Officer & Legal Affairs,Labor Director&Member of Data Privacy Adv Board | 52 |
| Ms. Dominique Yvette M. Leroy | CEO of Europe & Member of Management Board-Europe | 61 |
| Mr. Rodrigo Francisco Diehl | Member of Management Board | 50 |
| Dr. Guillaume Maisondieu | Senior Vice President of Group Accounting & Customer Finance | - |
| Mr. Hannes Wittig | Head of Investor Relations | - |
| Dr. Claudia Junker | Executive VP, Head of the Legal, Compliance & Data Privacy Department | - |
Audit Risk
3
Board Risk
3
Compensation Risk
5
Shareholder Rights Risk
1
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for DTEGY, sourced from Markets Gazette.