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SM Prime: Q3 2026 revenue fell 11.3%, and profit followed it down

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SM Prime Holdings

SM Prime Holdings' Q3 2026 results showed revenue of PHP 31,892.5 mn, operating profit of PHP 13,955.1 mn and net profit of PHP 11,201.7 mn. Year on year revenue fell 11.3% and net profit 12.4%, while the prior quarter, Q2, grew 7.6%, so the trend shifted into deceleration. Over the trailing twelve months the company earned PHP 47,803.2 mn of net profit, and the share trades at an LTM P/E of 10.4 with a dividend yield of 2.36%. Our conclusion: rather attractive – on the portal's model the upside to fair value is +14%, which outweighs the weak quarter. Our view: the share is rather attractive at the current price; upside on the portal model +14%.

Our view: is there upside

Our view in numbers

MetricOur read
VerdictRather attractive
Upside on the portal model+14%
How the model worksfundamental value-creation model: EBITDA growth times the target multiple, against market cap
Dividend yield, 12m2.4%
Net debt / EBITDA4.66 – high leverage
Strongest case forOn the portal's model the share has +14% upside to fair value at an LTM P/E of 10.4 and a margin near a third.
Strongest case againstQ3 revenue fell 11.3% year on year and profit dropped 12.4%, which puts the LTM profit base of PHP 47,803.2 mn in question.
What would change the viewIf revenue returns to growth next quarter, the verdict moves one step up toward 'attractive'; a repeat profit decline would move it down.

Key takeaways

— Q3 2026 revenue fell 11.3% year on year to PHP 31,892.5 mn, after 7.6% growth in Q2

— Net profit dropped 12.4% year on year to PHP 11,201.7 mn, and the 35.1% margin came in below last year's 35.6%

— Over the trailing twelve months the company earned PHP 47,803.2 mn of net profit on revenue of PHP 142,500.0 mn

— Leverage stands at 4.66x LTM EBITDA, a level only – the facts give no prior-period comparison to call a direction

— The share trades at 10.4x LTM earnings and 10.5x LTM EBITDA, while the 2.36% dividend yield is below the key rate

— On the portal's model fair value implies +14% upside to the current price

Key figures, PHP bn

MetricQ3 2025Q3 2026Change
Revenue35.931.9-11.3%
EBITDA19.6——
Operating profit15.714.0-11.2%
Net profit12.811.2-12.4%
Operating cash flow19.3——
Capex22.4——
EBITDA margin54.5%——
Net margin35.6%35.1%-0.5 pp

Q3 2026 revenue fell 11.3% year on year to PHP 31,892.5 mn, after 7.6% growth in Q2

Q3 2026 revenue came in at PHP 31,892.5 mn, 11.3% below the year-earlier level. In Q2 of the same year revenue grew 7.6%, so the swing from growth to decline is a deceleration, not an acceleration.

Quarterly revenue was also below the prior quarter: Q2 2026 stood at PHP 38,801.5 mn. The facts do not disclose the cause, so we state what moved: the company lost roughly a fifth of its quarterly revenue relative to Q2.

For the annual picture what matters more is that trailing-twelve-month revenue reached PHP 142,500.0 mn. The weak third quarter does not erase the scale of the business, but it shows that growth is uneven quarter to quarter.

Revenue and EBITDA by quarter

EBITDA margin

Missing EBITDA shown as zero, as in the original chart

Net profit dropped 12.4% year on year to PHP 11,201.7 mn, and the 35.1% margin came in below last year's 35.6%

Q3 2026 net profit was PHP 11,201.7 mn, 12.4% below the year-earlier figure. The profit decline is slightly deeper than the revenue decline, and the margin shows it: 35.1% versus 35.6% a year earlier.

Operating profit for the quarter was PHP 13,955.1 mn. It contracted with revenue but stayed positive and large relative to revenue, so operating efficiency is not broken, only slightly worse.

The gap between the 11.3% revenue decline and the 12.4% profit decline is small, but it means the company could not hold profitability at last year's level. The facts do not name the cause, so we record the fact: the margin fell by 0.5 percentage points.

Net profit by quarter

Over the trailing twelve months the company earned PHP 47,803.2 mn of net profit on revenue of PHP 142,500.0 mn

Over the trailing twelve months net profit was PHP 47,803.2 mn on revenue of PHP 142,500.0 mn. This is the base for the multiples and the dividend yield.

EBITDA for the same period was PHP 84,714.1 mn. It is well above net profit, which is expected for a company with heavy depreciation and debt: a large part of operating profit goes to servicing and wear on assets.

The trailing-twelve-month net margin, measured against revenue, is about a third – a high level that makes the share interesting at a modest multiple. But that base is under pressure: the third quarter showed a profit decline.

Net debt

at each reporting date, current net debt / EBITDA (LTM) = 4.66

Leverage stands at 4.66x LTM EBITDA, a level only – the facts give no prior-period comparison to call a direction

Net debt at the latest annual balance-sheet date was PHP 395,109.1 mn, equal to 4.66x trailing-twelve-month EBITDA. That is a moderately high load for a developer and requires EBITDA to stay stable.

The facts give no prior-period comparison, so we do not claim leverage rose or fell. The 4.66x level is what stands now, and it sets the company's sensitivity to a fall in operating profit.

With LTM EBITDA of PHP 84,714.1 mn, debt service remains manageable, but the cushion is not unlimited. If the weakness of the third quarter repeats, pressure on the metric will grow.

The share trades at 10.4x LTM earnings and 10.5x LTM EBITDA, while the 2.36% dividend yield is below the key rate

The LTM P/E is 10.4 and LTM EV/EBITDA is 10.5. These are modest multiples for a company with a net margin near a third, and they reflect both emerging-market risk and the current slowdown.

The trailing-twelve-month dividend yield is 2.36%. That is below the key rate, so the dividend alone does not make the share attractive: most of the return must come from value growth or preserved profit.

On the portal's model fair value implies +14% upside to the current price. This is our own calculation, not a market consensus, and it rests on EBITDA growth and a target multiple.

Share price, three years

close, last point 2026-11-11

On the portal's model fair value implies +14% upside to the current price

The portal's model puts the upside to fair value at +14%. It is the only yardstick in the facts that directly answers the question of headroom, and it falls in the 'rather attractive' band on our scale.

The model rests on EBITDA growth and a target multiple, so its main vulnerability is EBITDA itself. The third quarter showed falling revenue and profit, and if that is not a one-off, the model's base will prove too high.

At the same time a P/E of 10.4 and a 2.36% dividend yield leave little margin of safety. The +14% upside is a moderate, not an outstanding, argument, and it requires profit to stabilise.

Valuation on the latest reported figures

MetricValue
Market cap496 bn PHP
P/E (LTM)10.4
EV/EBITDA (LTM)10.5
P/B1.06
Net debt / EBITDA (LTM)4.66
ROE9.2%
Dividend yield (12m)2.4%

Bottom line

The report's strong side remains the scale of the business and high profitability: over the trailing twelve months the company earned PHP 47,803.2 mn of net profit on revenue of PHP 142,500.0 mn. But the third quarter showed revenue down 11.3% and profit down 12.4%, and the 35.1% margin came in below last year's 35.6%. Leverage of 4.66x LTM EBITDA and a 2.36% dividend yield leave little cushion, so the key question for a holder is whether profit stabilises next quarter. Our conclusion: rather attractive – on the portal's model the upside to fair value is +14%. Our view: the share is rather attractive at the current price; upside on the portal model +14%.