The Telstra Corporation Ltd (ASX: TLS) share price plunged 25% throughout the 2018 calendar year before rebounding strongly in 2019 amid a broader bull run for the S&P/ASX 200 (INDEXASX: XJO) index.
So, with the Telstra share price trading at $3.88 per share after releasing its half-year results this morning and announcing another dividend cut, could the Aussie telco's shares be in the buy zone?
Why the Telstra share price has rebounded in 2019
The Aussie blue chip has seen its share price rebound 40% so far this year amid TPG Telecom Ltd (ASX: TPM) dropping out of the 5G network race and a broader uptick in the ASX 200, but in part, the rebound has been as much due to its devaluation in 2018 as it has anything else.
The Telstra share price has been on the slide since the start of 2015, when it was valued as high as $6.60 per share before the emergence of NBN Co. ate into Telstra's profitability and growth.
In subsequent years, the Telstra Board has slashed the company's dividend, which sent shareholders heading for the exit given Telstra's historical near 100% payout policy.
In its August 2017 results, Telstra flagged a change to its payout policy to within a target 70–90% range and saw $5 billion wiped off its market cap in a matter of minutes.
While the company is set to receive $9 billion in compensation due to the NBN Co. introduction to the market, investors haven't been sold on management's transformation plan as the Telstra share price has slid lower for the best part of 4–5 years.
Could Telstra be in the buy zone?
Despite the recent rebound, the Telstra share price remains well below its peak pricing, but I wouldn't necessarily see that as a sign of undervaluation on its own, especially given its profit fell 40% to $2.1 billion during the year.
I'm personally not buying Telstra shares given the latest dividend cut, although I think the Aussie telco may still be better placed than some of its smaller competitors in the sector.
The company still boasts a market cap of $46 billion despite its recent share price woes, and the heightened potential for it to capture a large chunk of the 5G network market could prove to be the key to overcoming NBN Co's market dominance.
