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Vol. 3 No. 1 (2026): Sustainable Digital Transformation in Emerging Economies
Articles

Income Smoothing, Profitability, and Firm Size as Predictors of Valuation in Technology and Telecommunications Firms (2022–2024)

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  • Elsa Wijayanti Rukmana,
  • Eka Wirajuang Daurrohmah,
  • I Made Laut Mertha Jaya
Elsa Wijayanti Rukmana
Universitas Terbuka
Bio
Eka Wirajuang Daurrohmah
Universitas Terbuka
Bio
I Made Laut Mertha Jaya
Universitas Mahakarya Asia, Yogyakarta
Bio

Published 2026-02-28 — Updated on 2026-02-28

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Keywords

  • Company Valuation,
  • Initial Public Offering,
  • Income Smoothing,
  • Profitability

Copyright (c) 2026 Elsa Wijayanti Rukmana, Eka Wirajuang Daurrohmah, I Made Laut Mertha Jaya (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Abstract

Amid increasingly intense business competition, an IPO serves as an indicator of a company’s success in obtaining funding to accelerate growth. Company valuation, reflected in stock prices, becomes a primary basis for investors in making investment decisions. This study examines the effect of income smoothing (earnings management), Return on Assets (ROA), Net Profit Margin (NPM), and firm size on company valuation in the technology and telecommunications sectors, which are characterized by rapid growth, dynamism, and innovation. The population consists of 42 companies listed on the Indonesia Stock Exchange (IDX) before 2022. Using purposive sampling, 13 companies were selected with a three-year observation period (2022–2024), resulting in 39 total observations. Quantitative data were obtained from the official IDX website and company websites and analyzed using multiple linear regression. The results indicate that income smoothing, NPM, and firm size do not have a positive effect on company valuation. Meanwhile, ROA shows a significant negative effect on valuation. These findings suggest that profitability ratios are not necessarily the primary determinants of valuation in Indonesia’s technology and telecommunications sectors. Companies should strengthen valuation strategies by focusing on user growth, innovation development, and technological capabilities to enhance competitiveness and attract investors.

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