U.S. stocks rise on Fed cut bets; earnings continue to flow
On Thursday, Benchmark analyst reiterated their Buy rating on VEON Ltd (AS:VON) (NASDAQ:VEON) with a consistent price target of $60.00. The telecom operator, currently valued at $3.83 billion and trading at an attractive P/E ratio of 8.5x, reported its first-quarter financial results for 2025, showcasing significant top-line growth and Adjusted EBITDA increases. InvestingPro analysis indicates the stock is currently undervalued, with 11 additional ProTips available for subscribers. VEON’s revenue grew by 12.9% in local currency terms and by 8.9% to $1.026 billion in U.S. dollar terms, maintaining impressive gross profit margins of 87.14%. Adjusted EBITDA saw a rise of 10.4% in local currency and 13.7% to $439 million in U.S. dollar terms. These figures have been adjusted to account for the impact of the disruptive cyberattack in Ukraine during the first quarter of 2024 and the deconsolidation of TNS+ in Kazakhstan.
Benchmark’s projections for VEON’s revenue and Adjusted EBITDA had been more conservative, expecting a 5.6% increase in U.S. dollar revenue to $996 million and a 6.0% rise in Adjusted EBITDA to $409 million. The local currency EBITDA growth was originally estimated at a higher 12.7%. The reported figures surpassed these estimates, indicating a stronger performance by the company.
VEON’s direct digital revenue surged by 50.2% to $147 million in dollar terms and by 54.3% in local currency, now accounting for 14.3% of the total revenues. The company’s financial position appears robust with total cash and equivalents at $1.775 billion, providing ample liquidity. The net debt, excluding lease liabilities, stands at a manageable $1.81 billion. The Last Twelve Months (LTM) Equity Free Cash Flow reported was $387 million with capital expenditures (CapEx) amounting to $135 million.
The reported 12.9% local currency revenue growth notably outpaced the 7.6% average inflation rate across VEON’s markets by a significant 530 basis points, suggesting that the company is effectively managing inflationary pressures and demonstrating strong operational performance. This operational excellence has contributed to VEON’s remarkable 91.96% stock price appreciation over the past year. For detailed insights into VEON’s performance metrics and future potential, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, VEON Ltd reported a strong financial performance for the fourth quarter of 2024, with total revenue reaching $4 billion, an 8.3% increase compared to the previous year. Digital revenue also saw a significant rise of 63%, contributing $460 million to the total revenue. This growth in digital services has been pivotal, with digital now accounting for 12.6% of total revenues. In addition, Benchmark analysts raised their price target for VEON shares to $60, citing the company’s robust earnings report and strategic growth in digital segments. VEON also announced a partnership with Airspan Networks to enhance Ukraine’s telecommunications infrastructure, as part of a $1 billion investment plan to rebuild the country’s digital framework. Furthermore, VEON’s Kazakh subsidiary, QazCode, has partnered with AI firm Seekr to develop AI-powered business solutions, aiming to enhance process automation and data management. The company has also appointed Anand Ramachandran as the new Corporate Development Officer, overseeing Mergers & Acquisitions and Investor Relations. These developments are part of VEON’s ongoing strategy to drive growth and innovation across its markets.
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