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IHS Holding (IHS)
NYSE:IHS
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IHS Holding
(NYSE:IHS)
Rating:55Neutral
Price Target:
$6.00
▲(0.67%Upside)
Positive Factors
Earnings
IHS reported upside 1Q25 results vs. the Street and maintained its 2025 guidance across the board.
Market Environment
Management noted the Nigerian macro is stabilizing and investor confidence is returning.
Strategic Actions
The strategic review recently yielded a sale of its Rwanda segment for 8.3x EBITDaL, which should be accretive to valuation.
Negative Factors
Macroeconomic Risks
The portfolio retains risks to performance from macro, possible further industry rationalization in its emerging markets, and currency risk, especially within Nigeria.
IHS Holding (IHS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.03B
Dividend YieldN/A
Average Volume (3M)887.93K
Price to Earnings (P/E)―
Beta (1Y)1.09
Revenue Growth-10.70%
EPS Growth98.70%
CountryUS
Employees2,864
SectorCommunication Services
Sector Strength80
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.10
Shares Outstanding333,440,950
10 Day Avg. Volume1,022,581
30 Day Avg. Volume887,932
Financial Highlights & Ratios
PEG Ratio-0.41
Price to Book (P/B)-5.22
Price to Sales (P/S)0.00
P/FCF Ratio4.11
Enterprise Value/Market Cap2.55
Enterprise Value/Revenue0.73
Enterprise Value/Gross Profit5.89
Enterprise Value/Ebitda-0.80
Forecast
1Y Price Target
$8.25Price Target Upside38.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
IHS Holding Business Overview & Revenue Model
Company DescriptionIHS Holding (IHS) is one of the largest independent owners, operators, and developers of shared telecommunications infrastructure in the world. The company primarily operates in emerging markets across Africa, Latin America, and the Middle East. Its core services include the leasing of space on its towers to mobile network operators, providing them with the necessary infrastructure to expand coverage and improve connectivity for their customers.
How the Company Makes MoneyIHS Holding generates revenue through long-term lease agreements with mobile network operators (MNOs), who rent space on the company's telecommunications towers. This leasing model allows IHS to provide essential infrastructure to MNOs without them having to invest in building and maintaining their own towers. Additionally, IHS may offer ancillary services such as maintenance and power management to enhance the operational efficiency of the infrastructure it provides. The company's earnings are significantly influenced by its strategic partnerships with major telecom companies and its ability to expand its tower network in high-demand regions, thereby increasing its leasing capacity and revenue potential. Factors like the growing demand for mobile connectivity and data services in emerging markets further contribute to its financial growth.
IHS Holding Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q1-2025)
| % Change Since: -4.64%|
Next Earnings Date:Aug 19, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant positive trends, including strong organic revenue growth, increased adjusted EBITDA, and successful asset disposals. However, these were slightly offset by challenges such as currency depreciation and site churn in Nigeria. Overall, the company shows strong financial discipline and a positive outlook for the year.Q1-2025 Updates
Positive Updates
Strong Organic Revenue Growth
The company reported a 26% organic growth in revenue, driven by increased revenue from colocation, lease amendments, new sites, and CPI escalators.
Adjusted EBITDA Increase
Adjusted EBITDA reached $253 million with a margin of 57.5%, up 1,320 basis points compared to the previous year.
Significant Increase in ALFCF
Adjusted Levered Free Cash Flow (ALFCF) increased by approximately 248% year-over-year, driven by improved profitability and rephased interest payments.
Reduction in CapEx
Total CapEx was $44 million in the quarter, down 17.8% year-over-year, reflecting a narrowed focus on capital allocation.
Successful Asset Disposal
The company announced the sale of IHS Rwanda for $274.5 million, achieving a transaction multiple of 8.3x adjusted EBITDA after leases.
Improved Net Leverage Ratio
The consolidated net leverage ratio decreased to 3.4x, down from 3.7x at the end of 2024, showing significant progress in financial discipline.
Negative Updates
Impact of Currency Depreciation
Despite strong organic growth, the company faced challenges due to the 14% depreciation of the Naira against the dollar.
Site Churn in Nigeria
The company experienced the initial impact of 1,050 sites that MTN Nigeria will vacate this year, contributing to an approximate $1.6 million reduction in revenue year-on-year.
Decline in Towers and Tenants
Both towers and tenants were down approximately 3% and 1%, respectively, year-over-year, primarily due to divestitures of towers in Kuwait and Peru.
Company Guidance
During the IHS Holding Limited First Quarter 2025 Earnings Results Call, the company reported strong financial performance metrics, including a 26% organic revenue growth driven by increased colocation revenue, new sites, and CPI escalators. Adjusted EBITDA reached $253 million with a margin of 57.5%, marking an improvement of 1,320 basis points year-over-year. The adjusted levered free cash flow (ALFCF) increased by 248% to $150 million, largely due to improved profitability and interest payment rephasing. Total capital expenditures (CapEx) decreased by 17.8% to $44 million, demonstrating a strategic focus on capital allocation. The company also announced a reduction in its consolidated net leverage ratio to 3.4x and highlighted a strong liquidity position with over $900 million available. Furthermore, IHS announced the sale of its Rwanda operations for an enterprise value of $274.5 million, contributing to its strategic initiative to streamline operations and enhance shareholder value. Looking forward, the company remains optimistic about the growth opportunities driven by continuing 5G deployment, especially in its largest markets, Nigeria and Brazil. The guidance for full-year 2025 was reiterated, reflecting confidence in sustaining its operational and financial momentum.IHS Holding Financial Statement Overview
Summary
IHS Holding's financial statements reflect challenges, including negative net income and EBITDA margins, high leverage, and negative equity. While cash flow is a relative strength, overall financial health needs improvement, particularly in profitability and leverage.Income Statement
IHS Holding's income statement reveals mixed performance. Gross profit margin has improved, with TTM figures at 50.78%. However, the net profit margin remains negative due to persistent losses, albeit with a minor improvement in TTM. Revenue growth is inconsistent, showing a decline in the latest TTM period. The negative EBITDA margin is a significant concern, suggesting operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet displays significant weaknesses. The debt-to-equity ratio is concerningly high due to negative equity, indicating financial instability. Equity ratio has deteriorated, reflecting increased liabilities. Overall, the company exhibits high leverage, which poses risks during economic downturns.30
Negative
Cash Flow
Cash flow analysis shows some positive aspects. Operating cash flow to net income ratio is strong, indicating good cash conversion. However, free cash flow growth is inconsistent, with a minor decline in the TTM period. The ratio of free cash flow to net income indicates a better cash position relative to reported losses.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.73B | 1.71B | 2.13B | 1.96B | 1.58B | 1.40B |
| Gross Profit | 880.07M | 820.69M | 1.04B | 804.41M | 672.34M | 564.73M |
| EBITDA | -1.03B | -794.75M | -998.47M | 252.65M | 591.49M | 468.08M |
| Net Income | -45.60M | -1.63B | -1.98B | -470.40M | -26.12M | -322.68M |
Balance Sheet | ||||||
| Total Assets | 4.42B | 4.28B | 5.36B | 6.32B | 5.47B | 4.45B |
| Cash, Cash Equivalents and Short-Term Investments | 629.00M | 577.96M | 293.82M | 514.08M | 916.49M | 585.42M |
| Total Debt | 3.96B | 3.90B | 4.11B | 3.95B | 2.99B | 2.52B |
| Total Liabilities | 4.60B | 4.57B | 5.02B | 4.96B | 3.75B | 3.22B |
| Stockholders Equity | -352.30M | -454.58M | 109.85M | 1.13B | 1.58B | 1.21B |
Cash Flow | ||||||
| Free Cash Flow | 451.21M | 460.29M | 254.68M | 347.93M | 347.71M | 406.06M |
| Operating Cash Flow | 791.37M | 729.30M | 853.45M | 907.30M | 750.19M | 635.26M |
| Investing Cash Flow | -86.48M | 63.18M | -722.25M | -1.52B | -877.95M | -758.51M |
| Financing Cash Flow | -455.79M | -431.00M | -162.30M | 398.24M | 524.26M | -128.14M |
IHS Holding Technical Analysis
Positive
5.96
Price Trends
5.71
Positive
5.07
Positive
4.12
Positive
Market Momentum
0.12
Negative
52.82
Neutral
60.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IHS, the sentiment is Positive. The current price of 5.96 is above the 20-day moving average (MA) of 5.84, above the 50-day MA of 5.71, and above the 200-day MA of 4.12, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 52.82 is Neutral, neither overbought nor oversold. The STOCH value of 60.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $1.58B | 16.49 | 38.36% | 0.40% | 1.91% | 169.96% | |
62 Neutral | $40.68B | -1.16 | -12.05% | 3.89% | 2.04% | -69.68% | |
56 Neutral | $746.86M | 59.21 | -1.12% | 9.47% | -6.30% | -109.90% | |
56 Neutral | $1.27B | ― | -57.56% | ― | -1.56% | -10914.21% | |
55 Neutral | $2.03B | ― | 493.63% | ― | -10.70% | 98.70% | |
52 Neutral | $1.27B | ― | -57.56% | ― | -1.56% | -10914.21% | |
49 Neutral | $1.24B | ― | 21.93% | ― | -3.68% | -2563.04% |
* Communication Services Sector Average
Performance Comparison
IHS
IHS Holding
5.96
3.02
102.72%
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IDT
59.89
23.77
65.81%
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-37.59%
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124.64
-210.49
-62.81%
LILAK
Liberty LiLAC Group
6.34
-3.61
-36.28%
ATUS
Altice Usa
2.58
0.69
36.51%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.