Citi analyst Louis Tsang has reiterated their bullish stance on VNET stock, giving a Buy rating today.
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Louis Tsang has given his Buy rating due to a combination of factors that highlight VNET Group, Inc.’s promising growth prospects. The company has raised its revenue and EBITDA guidance for FY25, which aligns with Tsang’s above-consensus estimates, indicating strong financial performance. Additionally, VNET’s $50 million share repurchase program is expected to support the stock price, while potential updates on their B30 project, H-share IPO, and C-REIT could serve as catalysts for further re-rating.
Moreover, VNET’s strategic initiatives, such as their green electricity project with Shandong Highspeed, are anticipated to enhance margins by reducing power costs for both the company and its customers. The company’s focus on expanding its IDC capacity and leveraging AI-driven demand further strengthens its position in the market. Tsang views VNET as a core beneficiary of the China AI Capex story, with its robust EBITDA growth and favorable valuation, making it an attractive investment opportunity.
In another report released today, Bank of America Securities also maintained a Buy rating on the stock with a $11.30 price target.
VNET’s price has also changed dramatically for the past six months – from $4.270 to $6.980, which is a 63.47% increase.