NasdaqGS:VEON

Stock Analysis Report

Executive Summary

VEON Ltd., through its subsidiaries, provides mobile and fixed-line telecommunications services.

Rewards

Trading at 86% below its fair value

Earnings are forecast to grow 5.47% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 11.48% is not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Good value with acceptable track record.


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Share Price & News

How has VEON's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VEON has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-7.6%

VEON

22.0%

US Wireless Telecom

1.5%

US Market


1 Year Return

-3.2%

VEON

23.0%

US Wireless Telecom

20.1%

US Market

Return vs Industry: VEON underperformed the US Wireless Telecom industry which returned 23% over the past year.

Return vs Market: VEON underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

VEONIndustryMarket
7 Day-7.6%22.0%1.5%
30 Day-8.6%23.3%1.4%
90 Day1.7%27.0%8.7%
1 Year6.5%-3.2%24.6%23.0%22.7%20.1%
3 Year-28.1%-42.9%20.8%16.2%50.1%40.5%
5 Year-37.1%-50.7%103.1%85.9%73.1%54.1%

Price Volatility Vs. Market

How volatile is VEON's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is VEON undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VEON ($2.44) is trading below our estimate of fair value ($17.39)

Significantly Below Fair Value: VEON is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VEON is good value based on its PE Ratio (7.3x) compared to the Wireless Telecom industry average (23.4x).

PE vs Market: VEON is good value based on its PE Ratio (7.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: VEON is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: VEON is overvalued based on its PB Ratio (3.4x) compared to the US Wireless Telecom industry average (2.5x).


Next Steps

Future Growth

How is VEON forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

5.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VEON's forecast earnings growth (5.5% per year) is above the savings rate (1.7%).

Earnings vs Market: VEON's earnings (5.5% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: VEON's earnings are forecast to grow, but not significantly.

Revenue vs Market: VEON's revenue (0.8% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: VEON's revenue (0.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VEON's Return on Equity is forecast to be high in 3 years time (27.7%)


Next Steps

Past Performance

How has VEON performed over the past 5 years?

50.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VEON has high quality earnings.

Growing Profit Margin: VEON became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: VEON has become profitable over the past 5 years, growing earnings by 50.9% per year.

Accelerating Growth: VEON has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: VEON has become profitable in the last year, making it difficult to compare its past year earnings growth to the Wireless Telecom industry (-39.1%).


Return on Equity

High ROE: Whilst VEON's Return on Equity (30.74%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is VEON's financial position?


Financial Position Analysis

Short Term Liabilities: VEON's short term assets ($2.6B) do not cover its short term liabilities ($5.8B).

Long Term Liabilities: VEON's short term assets ($2.6B) do not cover its long term liabilities ($7.7B).


Debt to Equity History and Analysis

Debt Level: VEON's debt to equity ratio (471.7%) is considered high.

Reducing Debt: VEON's debt to equity ratio has increased from 407.6% to 471.7% over the past 5 years.


Balance Sheet

Inventory Level: VEON has a high level of physical assets or inventory.

Debt Coverage by Assets: VEON's debt is not covered by short term assets (assets are 0.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: VEON is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: VEON is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is VEON's current dividend yield, its reliability and sustainability?

11.48%

Current Dividend Yield


Dividend Yield vs Market

company11.5%marketbottom25%1.4%markettop25%3.7%industryaverage7.0%forecastin3Years9.3%

Current dividend yield vs market & industry

Notable Dividend: VEON's dividend (11.48%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: VEON's dividend (11.48%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

Stable Dividend: VEON has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: VEON has only been paying a dividend for 9 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (129.3%), VEON's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VEON's dividends in 3 years are forecast to be covered by earnings (64.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Ursula Burns (60yo)

1.2yrs

Tenure

US$7,209,428

Compensation

Ms. Ursula M. Burns has been the Executive Chairman of the Board of Directors and Chief Executive Officer at VEON Ltd. since July 30, 2018 and December 13, 2018 respectively. Ms. Burns has extensive intern ...


CEO Compensation Analysis

Compensation vs Market: Ursula's total compensation ($USD7.21M) is above average for companies of similar size in the US market ($USD4.88M).

Compensation vs Earnings: Ursula's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ursula Burns
Executive Chairman & CEO1.2yrsUS$7.21m0.013% $564.6k
Scott Dresser
Group General Counsel5.4yrsUS$3.03mno data
Kjell Johnsen
0.3yrsUS$1.76mno data
Aleksandr Krupnov
President4.7yrsno datano data
Augie Fabela
Co-Founder & Chairman Emeritus18.1yrsno datano data
Dmitry Zimin
Founder & Honorary President9.8yrsno datano data
Murat Kirkgoz
Group Deputy Chief Financial Officer0yrsno datano data
Muhterem Terzioglu
Group Chief Operating Officer0.3yrsno datano data
Sergi Herrero
Group Chief Operating Officer0.3yrsno datano data
Henrich Daubner
Group Director of Accounting0yrsno datano data

2.9yrs

Average Tenure

52yo

Average Age

Experienced Management: VEON's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ursula Burns
Executive Chairman & CEO1.2yrsUS$7.21m0.013% $564.6k
Augie Fabela
Co-Founder & Chairman Emeritus18.1yrsno datano data
Julian Horn-Smith
Director1.6yrsUS$260.50kno data
Mikhail Fridman
Director1.6yrsUS$40.00kno data
Andrei Gusev
Director1.6yrsUS$40.00kno data
Gennady Gazin
Director1.6yrsUS$315.50kno data
Guy Laurence
Director1.6yrsUS$307.85kno data
Gunnar Holt
Director1.6yrsUS$300.00kno data
Guillaume Bacuvier
Director1.6yrsUS$126.00kno data
Robert Jan de Kraats
Director1.6yrsUS$117.60kno data

1.6yrs

Average Tenure

55.5yo

Average Age

Experienced Board: VEON's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.7%.


Top Shareholders

Company Information

VEON Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: VEON Ltd.
  • Ticker: VEON
  • Exchange: NasdaqGS
  • Founded: 1992
  • Industry: Wireless Telecommunication Services
  • Sector: Telecom
  • Market Cap: US$4.268b
  • Shares outstanding: 1.75b
  • Website: https://www.veon.com

Number of Employees


Location

  • VEON Ltd.
  • The Rock Building
  • Claude Debussylaan 88
  • Amsterdam
  • Noord-Holland
  • 1082 MD
  • Netherlands

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VEONNasdaqGS (Nasdaq Global Select)YesADR EACH REPR 1 SHAREUSUSDApr 2010
35VDB (Deutsche Boerse AG)YesADR EACH REPR 1 SHAREDEEURApr 2010
A2DN8YDB (Deutsche Boerse AG)SPON ADR EACH REPR 1 ORD SHSDEEURMar 2017
0RO7LSE (London Stock Exchange)Common StockGBEURApr 2017
VEONENXTAM (Euronext Amsterdam)Common StockNLEURApr 2017
35V1DB (Deutsche Boerse AG)Common StockDEEURApr 2017
VEONABATS-CHIXE (BATS 'Chi-X Europe')Common StockGBEURApr 2017

Biography

VEON Ltd., through its subsidiaries, provides mobile and fixed-line telecommunications services. It offers voice and data telecommunication services through a range of mobile and fixed-line technologies. The company provides value added services, including short messages, multimedia messages, caller number identification, call waiting, data transmission, mobile internet, downloadable content, mobile finance services, machine-to-machine, and other services; national and international roaming services; wireless Internet access and mobile financial services; and mobile bundles and call completion services. It also offers fixed-line telecommunication services, such as voice, data, and Internet services; and PSTN-fixed telephony, Internet, data transmission and network access, domestic and international voice termination, and IPLC and TCP/IP international transit services for corporations, operators, and consumers, as well as sells equipment and accessories. The company provides its services under the Beeline, Kyivstar, Jazz, Djezzy, and banglalink brands in Russia, Pakistan, Algeria, Uzbekistan, Ukraine, Bangladesh, Kazakhstan, Kyrgyzstan, Armenia, and Georgia. It serves approximately 210 million customers. The company was formerly known as VimpelCom Ltd. and changed its name to VEON Ltd. in March 2017. VEON Ltd. was founded in 1992 and is headquartered in Amsterdam, the Netherlands. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 00:49
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.