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Ihs Holding Ltd. (IHS)
:IHS
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IHS Holding
(NYSE:IHS)
56Neutral
Positive Factors
Financial Performance
IHS is making clear progress on improving margins and returning to FCF/share growth in 2025 as it shores up profitability.
Market Expansion
Management highlighted a 'massive pickup in 5G' in Brazil and opportunities for investment in new tower sites and fiber.
Strategic Objectives
Continued execution toward its strategic objectives is viewed as positive, maintaining a positive long-term view of IHS as a compelling way to play emerging market growth.
Negative Factors
Asset Dispositions
Management reiterated its strategic priorities of completing $0.5-1.0B in asset dispositions, balance sheet strength and flexibility.
Capital Expenditure
IHS reported upside 3Q24 results and lowered its 2024 capex guidance.
IHS Holding (IHS) vs. S&P 500 (SPY)
Market Cap
$1.54B
Dividend YieldN/A
Average Volume (3M)713.34K
Price to Earnings (P/E)―
Beta (1Y)1.30
Revenue Growth-19.49%
EPS Growth16.08%
CountryUS
Employees2,864
SectorCommunication Services
Sector Strength98
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-4.91
Shares Outstanding333,440,950
10 Day Avg. Volume655,778
30 Day Avg. Volume713,340
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.82
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.94Price Target Upside93.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
IHS Holding Business Overview & Revenue Model
Company DescriptionIHS Holding (IHS) is a leading provider of telecommunications infrastructure, primarily focusing on the development, ownership, and operation of tower sites. The company operates in emerging markets across Africa, Latin America, and the Middle East, offering mobile network operators (MNOs) and other wireless service providers access to its extensive portfolio of towers for hosting their equipment, thereby facilitating efficient and reliable network coverage.
How the Company Makes MoneyIHS Holding generates revenue primarily through leasing space on its telecommunications towers to mobile network operators and other wireless service providers. This lease-based model allows MNOs to install their equipment on IHS's infrastructure, enabling them to expand and improve their network coverage without the capital expenditure associated with building their own towers. The company generally enters into long-term contracts with its clients, ensuring a stable and recurring revenue stream. Additionally, IHS may derive income from offering ancillary services such as maintenance, energy management, and site security to its tenants. Strategic partnerships with key telecommunications companies and expansion into new geographic regions also contribute to the company's growth and revenue.
IHS Holding Financial Statement Overview
Summary
IHS Holding faces significant financial challenges, with declining revenues, negative profitability, and an alarming balance sheet position characterized by negative equity. Despite some positive cash flow aspects, the overall financial health suggests potential risks and the need for strategic interventions to enhance liquidity and profitability.Income Statement
IHS Holding shows declining revenue and margins over recent years. The gross profit margin for 2024 is 47.96%, but the significant net losses and an EBITDA margin of -46.46% indicate operational inefficiencies. Revenue has decreased from 2023 to 2024, highlighting potential market or operational challenges.45
Neutral
Balance Sheet
The balance sheet reveals a concerning negative stockholders' equity in 2024, indicative of potential insolvency risk. The debt-to-equity ratio is not calculable due to negative equity, and liabilities exceed assets, raising alarms about financial stability. The equity ratio is negative due to the negative equity position, further emphasizing the financial distress.30
Negative
Cash Flow
While IHS Holding has managed to generate positive operating cash flow, indicating some operational cash generation capability, the free cash flow growth is volatile. The free cash flow to net income ratio is favorable due to substantial non-cash losses, but consistent capital expenditures and financing outflows highlight cash management challenges.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.78B | 1.71B | 2.13B | 1.96B | 1.58B | 1.40B | Gross Profit |
| 866.24M | 820.69M | 1.04B | 804.41M | 672.34M | 564.73M | EBIT |
| 503.79M | 479.15M | 530.65M | -141.07M | 31.01M | 331.94M | EBITDA |
| -1.20B | -794.75M | -998.47M | 252.65M | 591.49M | 468.08M | Net Income Common Stockholders |
| -2.33B | -1.63B | -1.98B | -470.40M | -26.12M | -322.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 149.44M | 577.96M | 293.82M | 514.08M | 916.49M | 585.42M | Total Assets |
| 1.72B | 4.28B | 5.36B | 6.32B | 5.47B | 4.45B | Total Debt |
| 218.04M | 3.90B | 4.11B | 3.95B | 2.99B | 2.52B | Net Debt |
| 68.60M | 3.32B | 3.82B | 3.43B | 2.07B | 1.93B | Total Liabilities |
| 1.73B | 4.57B | 5.02B | 4.96B | 3.75B | 3.22B | Stockholders Equity |
| 1.02B | -454.58M | 109.85M | 1.13B | 1.58B | 1.21B |
| Cash Flow | Free Cash Flow | ||||
| 19.33M | 460.29M | 254.68M | 347.93M | 347.71M | 406.06M | Operating Cash Flow |
| 311.33M | 729.30M | 853.45M | 907.30M | 750.19M | 635.26M | Investing Cash Flow |
| -90.16M | 63.18M | -722.25M | -1.52B | -877.95M | -758.51M | Financing Cash Flow |
| -222.29M | -431.00M | -162.30M | 398.24M | 524.26M | -128.14M |
IHS Holding Technical Analysis
Neutral
4.61
Price Trends
4.14
Positive
3.65
Positive
3.36
Positive
Market Momentum
0.44
Negative
74.68
Negative
64.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IHS, the sentiment is Neutral. The current price of 4.61 is below the 20-day moving average (MA) of 4.79, above the 50-day MA of 4.14, and above the 200-day MA of 3.36, indicating a neutral trend. The MACD of 0.44 indicates Negative momentum. The RSI at 74.68 is Negative, neither overbought nor oversold. The STOCH value of 64.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IHS.
IHS Holding Risk Analysis
IHS Holding disclosed 81 risk factors in its most recent earnings report. IHS Holding reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
IHS Holding Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $15.12B | 18.87 | 32.60% | 1.21% | -1.76% | 176.01% | |
73 Outperform | $97.13B | 43.07 | 91.38% | 3.12% | -3.05% | 51.74% | |
73 Outperform | $22.92B | 30.59 | -14.67% | 1.94% | -1.18% | 50.21% | |
58 Neutral | $27.01B | 3.11 | -10.53% | 4.44% | 2.30% | -43.13% | |
56 Neutral | $1.54B | ― | 493.63% | ― | -19.49% | 16.08% | |
56 Neutral | $24.82B | 138.92 | -35.81% | 3.72% | 12.22% | -2.68% | |
55 Neutral | $41.60B | 33.81 | -124.94% | 6.60% | -5.92% | -359.56% |
* Communication Services Sector Average
Performance Comparison
IHS
IHS Holding
4.57
1.04
29.46%
AMT
American Tower
208.32
33.98
19.49%
CSL
Carlisle Companies
342.53
-31.53
-8.43%
CCI
Crown Castle
95.16
3.88
4.25%
IRM
Iron Mountain
81.63
7.21
9.69%
SBAC
SBA Communications
212.20
11.03
5.48%
IHS Holding Earnings Call Summary
Earnings Call Date: Mar 18, 2025 | % Change Since: 17.90% | Next Earnings Date: May 20, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive overall sentiment, with strong revenue and EBITDA growth, successful strategic initiatives, and effective debt management outweighing the negative impacts of currency volatility and specific regional challenges.Highlights
Strong Revenue and EBITDA Performance
IHS Holding Limited reported 48% organic revenue growth for 2024, with 6.5% constant currency growth. The adjusted EBITDA reached $928 million, with a margin of 54.3%, up 100 basis points compared to 2023.
CapEx Optimization and Cash Flow Improvement
CapEx was significantly reduced by 56% year-over-year, driving an adjusted levered free cash flow (ALFCF) of $304 million, ahead of guidance.
Leverage Reduction and Strategic Refinancing
Net leverage ratio decreased to 3.7 times from 3.9 times. Significant refinancing efforts included $1.6 billion of debt refinancing to extend maturities and shift debt into local currencies.
Successful Asset Disposal
The sale of IHS Kuwait operations at 14.2 times adjusted EBITDA after leases, highlighting potential undervaluation of IHS assets.
Contract Renewals and Revenue Visibility
Extended commercial contracts with key customers MTN and Airtel, covering over 25,000 tenancies, with 72% of group revenue renewed or extended, improving financial visibility.
Lowlights
Negative Revenue Impact from FX Volatility
Despite strong organic growth, reported revenue declined by approximately 14% year-on-year in Q4 2024 due to significant naira depreciation and new financial terms with MTN Nigeria.
Decreased Colocation Rate in Nigeria
Colocation rate decreased to 1.56 times from 1.59 times in Q4 2023, due to reintegrated towers and tenant churn.
Higher Interest Costs
ALFCF was negatively impacted by increased interest costs following the November bond refinancing.
Partial Revenue Decline in LatAm
Revenue in the LatAm segment decreased by 18% due to FX movements and reduced revenue recognition from Oi.
Company Guidance
During the IHS Holding Limited fourth quarter and full year 2024 earnings call, the company reported strong financial performance, surpassing their guidance for key metrics such as revenue, adjusted EBITDA, and adjusted levered free cash flow (ALFCF). Revenue saw a 48% organic growth, driven by a 6.5% constant currency growth and benefits from foreign exchange resets and power indexation. Adjusted EBITDA reached $928 million with a margin of 54.3%, up 100 basis points from 2023, and ALFCF was $304 million, both exceeding expectations. Capital expenditures were below anticipated levels, and the consolidated net leverage ratio decreased to 3.7x by year-end. The company highlighted strategic initiatives, including contract extensions with key customers, resulting in renewed or extended 72% of group revenue, and improved cash flow generation due to reduced withholding tax rates in Nigeria. For 2025, IHS expects continued organic revenue growth, increased adjusted EBITDA and ALFCF, and aims for further deleveraging through asset disposals.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.