IoT And 5G Will Expand Future Market Opportunity

Key Takeaways

• Growing IoT adoption and digital transformation in regulated sectors are expanding recurring, higher-margin revenue streams and supporting stable, long-term topline growth.
  
• Innovation in network technologies and platform offerings is driving operational efficiency, customer retention, and financial flexibility for sustained profitability and future expansion.
  
• Margin pressure and competitive threats from commoditization, hardware mix, and industry consolidation pose risks to profitability, growth, and financial flexibility amid ongoing macroeconomic uncertainty.

Catalysts

Provides Internet of Things (IoT) services and solutions in the United States and internationally.

• Accelerating customer adoption of IoT devices and solutions across industries is significantly expanding KORE's total addressable market, driving recurring revenue growth as evidenced by the record 20.1 million connections and robust sales pipeline; this trend underpins stable, long-term topline expansion.
  
• Ongoing digital transformation, particularly in regulated sectors such as healthcare, logistics, and asset tracking, is driving demand for always-on, secure wireless connectivity and managed device services-supporting higher-margin, sticky recurring revenues and improved net margins as KORE deepens penetration in these verticals.
  
• The rollout of next-generation network technologies (e.g., 5G) is enabling new and more complex use-cases (AI/ML at the edge, connected health, telematics), positioning KORE's managed connectivity and advanced SIM solutions (Super SIM, SGP.32) as critical enablers-driving future revenue streams and enhancing EBITDA.
  
• Expansion and innovation in KORE's platform offerings (CaaS, KORE One, AI-driven support) are increasing operational efficiency and customer retention, paving the way for margin improvement and incremental EBITDA growth as the company scales.
  
• Sustained positive free cash flow generation and improved profitability, along with strategic investments in technology and global partnerships, are enhancing financial flexibility to reinvest for long-term revenue and earnings growth, addressing undervaluation risk driven by previous concerns about operational losses.

KORE Group Holdings Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming KORE Group Holdings's revenue will grow by 5.9% annually over the next 3 years.
• Analysts are not forecasting that KORE Group Holdings will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate KORE Group Holdings's profit margin will increase from -50.8% to the average US Wireless Telecom industry of 11.5% in 3 years.
• If KORE Group Holdings's profit margin were to converge on the industry average, you could expect earnings to reach $38.5 million (and earnings per share of $2.27) by about August 2028, up from $-143.4 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 3.8x on those 2028 earnings, up from -0.3x today. This future PE is lower than the current PE for the US Wireless Telecom industry at 22.9x.
• Analysts expect the number of shares outstanding to grow by 1.04% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

KORE Group Holdings Future Earnings Per Share Growth

Risks

• The decline in average revenue per user (ARPU) from $1.00 to $0.94 year-over-year, attributed to new connections coming from lower ARPU use cases, indicates a risk of margin compression and slower revenue growth if this trend continues or accelerates, especially as commoditization of basic IoT connectivity intensifies.
  
• The company's increasing reliance on sales of connectivity-enabling hardware (with IoT Solutions revenue growing 25% but gross margin projected to revert to lower historical averages) exposes KORE to the risk of lower overall profitability as hardware revenues become a larger portion of the mix and face industry-wide price compression and competition, potentially pressuring future EBITDA and net margins.
  
• Despite positive free cash flow for three consecutive quarters, the overall level of cash and restricted cash remains low ($21 million as of June 30, 2025), and the company continues to report net losses ($16.9 million this quarter), heightening risks related to balance sheet constraints, limited flexibility for investment, and potential future equity dilution impacting earnings per share.
  
• Rising global tariffs and supply chain disruptions-acknowledged as impacting some of KORE's key customers (particularly large global customers)-could result in delayed or deferred projects, contributing to unpredictable revenue recognition and elevated business risk if macroeconomic uncertainty persists or worsens.
  
• The broader trend towards industry consolidation and mounting competition from larger telcos and hyperscale cloud providers threatens to compress KORE's market share and pricing power, especially as customer wins are increasingly based on technological features that may be rapidly matched or surpassed by better-capitalized incumbents, undermining long-term topline growth and structural margins.

Valuation

• The analysts have a consensus price target of $6.0 for KORE Group Holdings 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 $9.0, and the most bearish reporting a price target of just $3.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $335.3 million, earnings will come to $38.5 million, and it would be trading on a PE ratio of 3.8x, assuming you use a discount rate of 12.3%.
  
• Given the current share price of $2.43, the analyst price target of $6.0 is 59.5% 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.