Rising Double Digit Revenue and Net Income Will Shape Future Outlook

Key Takeaways

• Accelerated digital adoption, 5G expansion, and network modernization are driving higher revenue, increased data usage, and improved earnings.
  
• Rapid growth in digital, fintech, and data infrastructure diversifies revenue streams and strengthens long-term operating leverage and margin potential.
  
• Reliance on non-recurring gains, exposure to unstable markets, rising costs, and regulatory risks threaten Zain's earnings stability, margins, and long-term balance sheet strength.

Catalysts

Provides mobile telecommunication services.

• Sustained subscriber growth and ARPU uplift across key markets, particularly driven by accelerating digital adoption, youth demographics, and strong economic recoveries in Iraq and Sudan, is fueling top-line revenue momentum and improving earnings visibility.
  
• Scaling 5G infrastructure and continued network modernization-now including 5G advanced launches and expanded coverage-are enabling premium service offerings, spurring higher data usage, and supporting future increases in ARPU and revenue.
  
• High-growth diversification through digital and fintech verticals (e.g., ZainTech, ZOI, and Bede) is ramping up rapidly, collectively contributing roughly 10% of group revenue, and is positioned to deliver structural improvements to net margin and operating leverage as these lines mature.
  
• Investment in regional connectivity and data center infrastructure (notably via ZOI and subsea networks) is capturing growing demand for enterprise, IoT, and data services-sectors experiencing robust long-term expansion-thereby supporting durable revenue streams and margin improvement.
  
• Exposure to large and underpenetrated markets, along with ongoing product innovation, leaves the company well positioned to capitalize on population growth, urbanization, and rising digital consumption, underpinning long-term revenue, earnings, and free cash flow growth.

Mobile Telecommunications Company K.S.C.P Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Mobile Telecommunications Company K.S.C.P's revenue will grow by 4.7% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 11.7% today to 10.2% in 3 years time.
• Analysts expect earnings to reach KWD 247.6 million (and earnings per share of KWD 0.06) by about September 2028, up from KWD 246.7 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.4x on those 2028 earnings, up from 8.9x today. This future PE is greater than the current PE for the KW Wireless Telecom industry at 9.1x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 19.48%, as per the Simply Wall St company report.

Mobile Telecommunications Company K.S.C.P Future Earnings Per Share Growth

Risks

• The company's strong financials in H1 2025 are supported by several one-off items (such as the KWD 15 million gain from the Maroc Telecom/INWI settlement) and foreign exchange-driven revenue uplift in Sudan, which may not be sustainable or repeatable in future periods, and could mask underlying earnings volatility, especially in high-risk markets. (risk to net income and future earnings predictability)
  
• Expansion into geopolitically unstable and high-currency-risk markets such as Sudan and Iraq exposes Zain to ongoing operational disruptions, potential asset write-downs, and restrictions on cash repatriation-as highlighted by Sudan's reliance on exchange rate-driven price increases and difficulties in upstreaming cash-directly impacting future revenues and earnings stability.
  
• Sustained margin compression in core markets like Iraq and Kuwait-due to rising operating expenditures, increased marketing costs, and structural shifts to lower-margin trading revenue-suggests intensifying competition and the challenges of scaling digital initiatives, potentially capping long-term EBITDA margin recovery and profitability.
  
• Increasing capital expenditure requirements for 5G and digital infrastructure, coupled with management's guidance of a high CapEx-to-revenue ratio (15–17%), may limit free cash flow generation and raise debt levels, thereby placing sustained pressure on net margins and balance sheet strength over multiple years.
  
• Regulatory risks remain elevated, especially regarding potential new entrants (such as a possible fourth operator in Iraq), unresolved spectrum/license scenarios, and Pillar Two tax impacts; any regulatory changes or mandated price reforms could adversely affect ARPU growth, compress industry-wide margins, and pressure Zain's long-term revenue and earnings trajectory.

Valuation

• The analysts have a consensus price target of KWD0.617 for Mobile Telecommunications Company K.S.C.P based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of KWD0.71, and the most bearish reporting a price target of just KWD0.53.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be KWD2.4 billion, earnings will come to KWD247.6 million, and it would be trading on a PE ratio of 18.4x, assuming you use a discount rate of 19.5%.
• Given the current share price of KWD0.51, the analyst price target of KWD0.62 is 17.4% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.