Is VEON (NasdaqGS:VEON) Still Undervalued Following Fresh Zacks Attention?

Why Zacks Coverage Has Put Fresh Attention on VEON

Recent Zacks coverage spotlighted VEON (VEON) for what it described as favorable valuation metrics and a strong earnings outlook. This recognition appears to be a key reason the stock is drawing more investor attention.

See our latest analysis for VEON.

Over the past month VEON has seen an 11.35% share price return to US$57.48, while its year to date share price return of 9.07% contrasts with a 1 year total shareholder return that is down 4.9%. This suggests recent momentum has picked up after a weaker period for income focused holders.

If VEON’s recent move has you looking for other ideas in the sector, it can be useful to scan telecom and infrastructure related plays through 39 power grid technology and infrastructure stocks

After VEON’s recent swing higher, the real call is whether that move already reflects the upside or still leaves room for value. To test that, it helps to line up the current price against the valuation markers.

Most Popular Narrative: 31.1% Undervalued

Analysts following VEON see a fair value of $83.44 versus the recent $57.48 share price, which frames the current move as only part of a bigger story.

VEON is executing on opportunities to crystallize hidden value in its fast-growing digital and fintech assets (for example, possible monetization or partial IPOs of JazzCash, a Kyivstar listing, or separate tracking structures for digital businesses), which could positively re-rate the stock, unlock shareholder value, and enhance its balance sheet for further growth or returns.

Read the complete narrative.

Curious what sits behind that fair value gap. The narrative leans heavily on faster earnings growth, steadier margins and a specific profit multiple that is not obvious from the headline numbers.

Result: Fair Value of $83.44 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, VEON’s story also depends on conditions that can turn quickly, including currency swings in its core markets and the impact of its relatively high debt load.

Find out about the key risks to this VEON narrative.

Another View on VEON’s Valuation

The first narrative paints VEON as 31.1% undervalued based on future earnings and cash flows. The simple P/E picture looks very different. VEON trades on about 67.1x earnings, while the fair ratio is 22.4x and peers are closer to 13.9x to 15.2x. That gap points to meaningful valuation risk if sentiment cools.

Our preferred multiple work shows VEON priced far ahead of both its fair ratio and the wider wireless telecom group. The question for you is whether the growth story and analyst conviction justify paying such a premium, or whether it leaves little room for error.

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With mixed signals on VEON’s valuation and outlook, it helps to move fast and test the story against your own judgement. To weigh both the concerns and potential upside together, start with 3 key rewards and 3 important warning signs.

Looking for more VEON style investment ideas?

If VEON has caught your attention, do not stop your research at a single stock. Broader ideas can help you stress test your thinking and spot better fits.

• Target potential upside by scanning companies that trade below their estimated worth through the 53 high quality undervalued stocks.
• Strengthen the defensive side of your portfolio by checking out the 80 resilient stocks with low risk scores that score well on resilience.
• Hunt for underfollowed opportunities that the market may be slow to price by reviewing the screener containing 19 high quality undiscovered gems.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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