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7040

Governance: C

GO TELECOM

Etihad GO Telecom Co.

93.80 SAR / Share

As of: May 28, 2026

11.5x P/E Ratio Trailing 12 Months

3.3x P/B Ratio Price to Book Value

0.3% Dividend Yield Annual Dividend / Share

3.19B SAR Market Cap Total Valuation

0.67 Beta Systematic Risk Index

15.3% Net Margin Net Profit / Revenue

The Story

GO TELECOM is undergoing a structural transformation, pivoting from a legacy fixed-line operator into a diversified digital services and fintech ecosystem with a robust net-cash position.

Source: Q3 2026 (2026-02-26)

Value Creation -3.9% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

0.3%

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+0.7%

Payout Ratio Percent of net profits distributed as dividends

3.7%

Net Margin Net profit margin generated from total operational revenue

15.3%

ROIC Return on Invested Capital

3.1%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

11.5x

P/B Ratio Market capitalization compared to corporate book value

3.3x

EV / EBITDA Operating multiple reflecting core operational leverage

7.4x

EV / SALES Asset pricing multiple relative to total topline revenue

1.5x

Growth Story

GO TELECOM has demonstrated an aggressive expansion trajectory, with revenue surging from SAR 630.3 million in fiscal 2023 to a TTM figure of SAR 1.82 billion. This rapid scaling is driven by a significant increase in interconnection and data revenues, alongside the strategic integration of Ejad Technology, which contributed over SAR 101 million in systems analysis revenue during the nine months ended December 31, 2025. While the historical sustainable growth rate of 0.72% reflects a period of lower capital efficiency, the company's current reinvestment strategy is focused on the third phase of its 5G network deployment, aiming to cover 50% of populated areas by 2027. This infrastructure push, combined with the launch of micro-financing activities, suggests a shift toward a more capital-intensive but higher-capacity growth model.

Profitability Dynamics

The company's profitability profile is in a state of transition; while its five-year average ROIC of 3.15% trails its WACC of 7.06%, current TTM metrics show a strengthening operational core with an operating margin of 16.8%. This value-creation gap is narrowing as the company scales its higher-margin digital segments. Cash flow generation is bolstered by a disciplined approach to liquidity, evidenced by SAR 413 million held in Murabaha deposits yielding up to 5.7% per annum. The acquisition of Ejad Technology was structured with a contingent consideration of up to SAR 46.7 million, directly tying future outflows to the achievement of specific net profit targets, thereby protecting the group's bottom-line integrity during its expansion phase.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

0.67

Cost of Equity Minimum required rate of return demanded by shareholders

7.2%

WACC Weighted average cost of total debt and equity funding

7.1%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

2.0%

Risk Factors

GO TELECOM maintains a conservative leverage profile with a total debt of SAR 64.6 million against a substantial cash reserve of SAR 551.5 million, resulting in a negative net-debt position. The primary risks are operational and regulatory rather than financial; the company faces strict network deployment deadlines from the Communications, Space and Technology Commission (CST), with the potential for spectrum license revocation if Phase 3 commitments are not met by 2027. Additionally, the entry into micro-consumer financing via GO Money introduces new credit and regulatory risks inherent in the financial services sector. A beta of 0.68 indicates lower sensitivity to broader market volatility, though the company remains exposed to the execution risks of integrating its new IT and HR subsidiaries.

Governance Disclosures

Rating: C

We track 10 key governance and oversight matters for this company in our database.

Significance: 4/10 Tunneling

Management and Board Remuneration

Total compensation for key management personnel and the Board of Directors amounted to SAR 28.18 million for the nine-month period, including SAR 3.67 million specifically for Board remuneration and committee rewards.

Significance: 7/10 Tunneling

Contingent Consideration and Finance Costs to NCI Affiliates

Following the acquisition of Ejad Technology, the Group recognized a contingent consideration liability of SAR 39.75 million due to related parties. Additionally, finance costs totaling SAR 4.32 million were paid to family members of a shareholder with non-controlling interests.

Mitigating Factors: The contingent consideration is subject to the achievement of specified revenue and net profit targets.

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In-Depth Analysis