VEON: Telecommunications Stock Worth Buying

Veon Telecomunications – Shares of Amsterdam-based telecommunications provider VEON (VEON) have been losing momentum of late due to soaring market volatility and macroeconomic uncertainty. However, VEON is expected to deliver strong returns with strong global brand recognition and strong cash flow despite the weak market. Read on.

Headquartered in Amsterdam, the Netherlands, VEON Ltd. (VEON) is a global internet and connectivity service provider. Listed on the Nasdaq stock exchange and Euronext, it is a leading multinational telecommunications company.

Last week, VEON won the Best Mobile Operator Service for Connected Consumers award for its MobileID service at the 2022 Global Mobile Awards. VEON CEO Kaan Terzioğlu said, “The Global Mobile Awards are one of the most prestigious awards in telecommunications and this recognition demonstrates the work we do. do this across the industry and with our partners to ensure customer data is secure and stored by licensed, regulated and locally based service providers. MobileID is an important step in that direction, and we will work actively to expand its use through carrier adoption and interoperability agreements.”

VEON shares have fallen 76.6% in price this year and 23.5% over the past five days to close Friday’s trading session at $0.40. This can be attributed to the bearish market sentiment due to the ongoing Russo-Ukrainian war and increased market volatility.

Here’s what could shape VEON’s performance in the near future:

Strong Liquidity

As of February 27, VEON had $2.10 billion in cash and deposits. This includes bank account deposits, money market funds, and on-demand deposits at several international banks in the European Union, Japan, and the United States. Also, the company has a $1.25 billion revolving credit facility, of which it has used $430 million to pay its senior notes, which are due March 1, 2022. VEON has other debt maturities at the parent company level in the current year. The revolving credit facility will mature in March 2025.

Regarding this, VEON CFO Serkan Okandan said, “Our USD 1.5 billion cash and time deposit balance and USD 0.8 billion undrawn credit line below the RCF will allow us to maintain a prudent liquidity position in times of crisis. at this time of macroeconomic uncertainty.”

Impressive Finance

VEON’s total revenue increased 6.8% year-on-year to $7.79 billion in fiscal 2021, ending December 31, 2021. This can be attributed to a 5.3% increase in total services revenue and a 14.3% increase in mobile data revenue. Its EBITDA stood at $3.33 billion, up 5.7% from the same period last year. Net income increased 354.3% from last year’s value to $801 million, while free equity cash flow was up 38% from the same period a year earlier to $421 million.

VEON’s total cellular subscribers reached 203.60 million as of December 31, 2021, up 4.4% year-on-year. Also, the company’s total 4G subscribers rose 29.9% year over year to 97.30 million.

Discount Value

In terms of non-GAAP forward P/E, VEON is currently trading at 1.66x, which is 89.1% lower than the industry average of 15.23x. Additionally, the Price/Sales and Price/Cash Flow forward multiples are 0.09 and 0.25, respectively, significantly lower than the industry averages of 1.44 and 9.34.

The forward Price/Book ratio of 0.62 VEON is 75.6% lower than the industry average of 2.52, while the forward EV/EBITDA multiple of 2.46 is 72.4% lower than the industry average 8, 89. Furthermore, the EV/Sales ratio advanced 1.08 VEON compared to the 2.21 industry average of 2.21.

POWR Rating Reflects Rosy’s Prospects

VEON has an overall A rating, which is equivalent to a Strong Buy in our possession POWRA Rating system. The POWR rating is calculated taking into account 118 different factors, with each factor being weighted to an optimal level.

VEON has an A for Value and a B for Quality and Growth. The industry’s lower stock valuation metrics justify the value rating. In addition, VEON’s trailing 12-month 62.71% ROE is 663.3% lower than the industry average of 8.22%, which is in sync with quality. Also, the company’s net profit has been increasing at a CAGR of 5% over the last three years, in line with the Growth rate.

Among 48 stocks in A-rated Telecommunications – Foreign industry, VEON is ranked #10.

Beyond what I’ve stated above, take a look at the VEON ratings for Sentiment, Stability and Momentum here.

The main thing is

VEON is one of the world’s leading telecommunications providers. The company is well positioned to benefit from the growing demand for internet connectivity and services amid remote lifestyles and the global rollout of 5G. In addition, as central banks around the world prepare to raise their benchmark interest rates, various telecommunications companies may be negatively impacted by rising borrowing costs. However, VEON is impressive liquidity support is expected to protect against this risk to some degree. So, we think VEON can be a valuable addition to one’s portfolio right now.

How VEON Ltd. (VEON) Against His Colleagues?

VEON has an overall POWR Rating of A, equivalent to a Buy Strong rating. See other stocks in Telecom – Foreign industry rated A (Buy Strong): Telekom Austria AG (TKAGY), Bezeq The Israel Telecommunication Corporation Limited (BZQIY), and the Japan Inc. Internet Initiative. (IIJIY).