stc Group
Fundamental — what it's worthbottom-up fair value
Built up from a full 5-year FCFF DCF, a dividend model, relative EV/EBITDA multiples and normalized earnings power — what is it worth?
Is it cheap or expensive right now?
Latest price vs our fair value. A comparison, not a recommendation.
What it's worth — four lenses
Four independent valuation methods, blended into one weighted central fair value.
| Valuation lens | Per share (SAR) | Weight |
|---|---|---|
| FCFF DCF — primary | 50.12 | 35% |
| Dividend discount model | 45.88 | 25% |
| Relative EV/EBITDA multiples | 47.21 | 20% |
| Normalized earnings power | 43.29 | 20% |
| Weighted central fair value | 47.11 | +8.1% vs spot |
The four lenses span SAR 43.3 (the normalized floor, cautious) to SAR 50.1 (the FCFF DCF, the ceiling), all near or above spot — the relative and dividend lenses already sit close to the price. The pace of the 5G/FTTH build (the dividend-cover math) and whether CBU ARPU keeps compounding are the swing factors. Full detail is in the study and the open model.
Technical & price structuretrend, momentum, key levels
Trend, momentum and key levels — what is the price doing now?
What the chart says
In plain terms: stc Group trades close to our weighted central fair value of SAR 47.11 — a genuinely converged read across four independent lenses. The primary FCFF DCF lands highest at SAR 50.12 (a five-year forward build discounted at the company's WACC); the dividend discount model (SAR 45.88) and relative EV/EBITDA multiples (SAR 47.21) sit almost exactly on the current price; the through-cycle normalized-earnings floor (SAR 43.29) is a touch below spot. This is Saudi Arabia's dominant integrated telecom operator — near-91%-equity-financed, with net debt/EBITDA near 0.3x — where the swing factor is the dividend-cover math: free cash flow covers the dividend about 0.93x at the base FY26E capex plan (~16.5% of revenue) for the 5G/FTTH build-out, tightening to roughly 0.86x at the top of capex guidance. The bull case (~SAR 59) is that capex intensity eases while CBU ARPU keeps compounding; the bear case (~SAR 36) is that capex stays elevated while competitive intensity caps ARPU growth. What moves it near-term is the SAMA/Fed policy-rate path (the discount-rate channel) and the pace of the 5G/FTTH build.
Key levels
Volatility & where the case breaks
| Typical daily moveRoughly how far the price swings in an average day (based on a measure called ATR). Bigger means choppier. | ~0.8% |
Monte Carlo — where could the price go?near-term price paths
50,000 simulated futures — near-term price paths, independent of the fundamental value.
The 5th–95th and 25th–75th percentile bands from the 50,000-path simulation. Static and pre-computed — independent of the fundamental levers above.
The exact percentiles
The 5th / 25th / middle / 75th / 95th outcomesLine up all 50,000 outcomes low to high — these are the values at the 5%, 25%, 50%, 75% and 95% marks., from 50,000 paths.
| Timeframe | Rare low (5%) | 25% | Middle | 75% | Rare high (95%) |
|---|
What drives the odds
50,000 paths, 16 forces: the SAMA/Fed policy-rate path (the discount-rate channel), KSA consumer (CBU) ARPU & data-monetization trend, 5G/FTTH capex intensity (the dividend-cover swing), consumer-spending growth, the SAR/USD peg carry, sector-multiple drift, and the international-subsidiary drag — plus event forces: a quarterly earnings surprise, a regulatory or spectrum-fee action, a sovereign-rating pass-through, a TASI/MSCI index-rebalance flow, a spectrum-auction or capex-commitment surprise, an international-subsidiary event, a one-off monetization item, a competitive-intensity/price-war shock, and a dividend policy step-up. Details in the methodology.
Peer set & risks
Where stc Group sits in its markets
stc Group is Saudi Arabia's dominant integrated telecom operator by revenue and subscriber base — a low-leverage, high-cash-generation franchise (net debt/EBITDA near 0.3x) on an EBITDA margin around 31% and a dividend yield near 5.0%. This is a competitive map, not a price table.
| Arena | stc Group's position | Main rivals |
|---|---|---|
| Market position (KSA telecom) | #1 by revenue & subscribers | Mobily (Etihad Etisalat) · Zain KSA |
| EBITDA margin | ~31% | varies by disclosure basis |
| Capex intensity (% of revenue) | ~16–17% (5G/FTTH build-out) | sector-wide elevated capex cycle |
| Net debt / EBITDA | ~0.3× (low leverage) | peers more levered |
| Dividend yield | ~5.0% | stc the sector's most consistent payer |
| International-subsidiary mix | ~33–34% of EBITDA | Mobily/Zain KSA are domestic-only |
The debate is whether the dividend-cover math tightens as 5G/FTTH capex peaks, or whether ARPU compounding and the fading international drag let stc grow into a higher multiple — which the FCFF DCF answers more optimistically than the dividend and relative lenses. Competitive map, not advice.
About this series & how we build these
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Edition: 09 Jul 2026. Older editions stay in the Library.