Looking to buy shares in an S&P/ASX 200 Index (ASX: XJO) telco stock with a strong growth outlook?
Then you might want to give Telstra Group Ltd (ASX: TLS) shares a pass and have a look at Superloop Ltd (ASX: SLC) instead.
With a market cap of $1.6 billion, Superloop is still a minnow compared to Telstra, which commands a market cap of $59.4 billion.
But the smaller ASX 200 stock has been outperforming Telstra shares for a long time now.
Year to date, Superloop shares are up 24.7%, compared to an 8.6% gain posted by Telstra. Stepping back a full year, Superloop shares are up 46.3% compared to the 27.9% 12-month gain in the Telstra share price.
And if we go back five years, then Superloop shares are up 247.8%, racing ahead of the 55.3% gains posted by Telstra over this period.
Now, Telstra does pay dividends, which Superloop does not. At least not yet. But even taking Telstra's 3.8% partly-franked dividend yield into account, Superloop shares have still delivered materially superior returns.
This strong performance and resulting gains in its market cap saw the stock added to the ASX 200 Index in September.
And looking ahead, Alphinity Investment Management portfolio manager Stuart Welch believes the company could benefit from further earnings upgrades (courtesy of The Australian Financial Review).
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ASX 200 stock on the growth path
"We invest in companies that are delivering earnings ahead of expectations and have future earnings forecasts upgraded," Welch explained.
Asked which stock his fund owns that most people wouldn't be familiar with, Welch said:
Alphinity typically invests in large, reasonably valued, quality businesses that are in an earnings upgrade cycle. So, it is rare that investors haven't heard of the stocks we invest in.
However, [one that] readers might be less familiar with is Superloop, which competes against Telstra offering high speed NBN, fixed wireless broadband, and mobile phone services. They also service business and wholesale customers.
Commenting on why he's bullish on the ASX 200 stock, Welch concluded:
In our view, Superloop has the potential to continue having future earnings forecasts upgraded as they take market share, given their relatively low-cost positioning supported by their infrastructure ownership.
Superloop's Telstra beating growth figures
Superloop reported its half-year (H1 FY 2026) results on 18 February.
Highlights included a 23% year-on-year increase in revenue to $317.6 million.
And underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) for the six months were up 46% to $55.8 million.
As for those earnings upgrades, the ASX 200 stock boosted its guidance for full-year FY 2026 underlying EBITDA to between $112 million and $120 million, up from prior guidance of $109 million to $117 million.
