T4F Entretenimento S.A. operates as a live entertainment company in South America. It promotes a range of artistic and cultural content. The company also promotes and sells tickets for shows and events, such as live music events; produces family events, theater, and cultural expositions; operates venue; operates in electronic ticketing industry under the Tickets for Fun and Ticketek brands; sells food, beverage, and merchandise; provides catering services at venues; and offers corporate sponsorship services comprising event promotions. The company was founded in 1983 and is based in Sao Paulo, Brazil.

Brazil

T4F Entretenimento S.A.

Consumer Cyclical

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

SHOW3.SA reported revenue of BRL 166mn in the last 12 months, down 76% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. Market expects EPS to reach BRL 0.38 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 29ppts and its growth decelerated by 9ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 33ppts and its growth decelerated by 18ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -26.8% in the last 12 months, a decline from 12.8% in FY23. 

Historically, SHOW3.SA has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -41.9%, down from 8.2% in FY23. 

T4F Entretenimento S.A. reported a return on equity (RoE) of -44.7% in the last 12 months, down from 39.8% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -15.2% in the last 12 months, a decrease from 11.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -29.2%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.5 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

SHOW3.SA has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is usually stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, inadequate interest coverage, and poor cash flow generation.

In highly turbulent market conditions, SHOW3.SA is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, SHOW3.SA is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. In particular, the stock is underpriced on P/E. 

T4F Entretenimento S.A.

R$ 0.64

3

T4F Entretenimento S.A.

R$ 0.64

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

R$ 0.64

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