Kingsoft Cloud Holdings (KC) AI Stock Analysis

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Kingsoft Cloud Holdings

(NASDAQ:KC)

Rating:56Neutral

Price Target:

$13.50

▲(1.28%Upside)

Kingsoft Cloud Holdings presents a mixed investment case. The most significant positive factor is the potential growth in AI and cloud services, as highlighted in the earnings call. However, financial performance issues, including net losses and negative P/E, weigh heavily on the overall score. Technical indicators show some short-term weakness but long-term potential, while valuation remains a concern due to lack of profitability and income for investors.

Kingsoft Cloud Holdings (KC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.64B

Dividend YieldN/A

Average Volume (3M)1.93M

Price to Earnings (P/E)―

Beta (1Y)2.12

Revenue Growth13.85%

EPS Growth3.47%

CountryUS

Employees12,335

SectorTechnology

Sector Strength82

IndustrySoftware - Application

Share Statistics

EPS (TTM)-0.01

Shares Outstanding274,960,660

10 Day Avg. Volume2,052,192

30 Day Avg. Volume1,927,495

Financial Highlights & Ratios

PEG Ratio-0.51

Price to Book (P/B)10.52

Price to Sales (P/S)0.00

P/FCF Ratio-74.14

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$17.66

Price Target Upside32.48% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Kingsoft Cloud Holdings Business Overview & Revenue Model

Company DescriptionKingsoft Cloud Holdings (KC) is a leading independent cloud services provider based in China. The company offers a comprehensive range of cloud solutions, including cloud infrastructure as a service (IaaS) and platform as a service (PaaS) to businesses across various industries. Kingsoft Cloud's services are designed to enhance the flexibility, scalability, and efficiency of its clients' operations, supporting their digital transformation initiatives.

How the Company Makes MoneyKingsoft Cloud Holdings generates revenue primarily through the provision of cloud services, which include computing, storage, networking, database, and security solutions. The company charges customers based on usage, subscription plans, and service level agreements. Key revenue streams include public cloud services, where customers access shared resources, and enterprise cloud services, which offer customized solutions for larger clients. Additionally, Kingsoft Cloud benefits from strategic partnerships with technology companies and industry leaders to expand its service offerings and reach. These collaborations help drive adoption and utilization of Kingsoft's cloud services, contributing significantly to its earnings.

Kingsoft Cloud Holdings Earnings Call Summary

Earnings Call Date:May 28, 2025

(Q1-2025)

% Change Since: 3.33%|

Next Earnings Date:Aug 26, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed outlook. While there is significant growth and expansion in AI and public cloud segments, challenges in operating profits, declining gross margins, and external pressures such as chip bans present concerns. Ecosystem collaborations and strategic investments in AI provide a positive outlook, but are balanced by operational and financial challenges.

Q1-2025 Updates

Positive Updates

Year-over-Year Revenue Growth

The company recorded a year-over-year revenue growth of 11%, reaching RMB 1.97 billion, with public cloud increasing by 14% to RMB 1.35 billion.

AI Business Expansion

AI gross billing reached RMB 525 million, representing a year-over-year increase of over 200% and a quarter-over-quarter growth of 11%, contributing 39% of public cloud revenue.

Ecosystem Collaboration

Revenue from Xiaomi and Kingsoft ecosystem reached RMB 500 million, up 50% year-over-year, contributing 25% to total revenue.

Non-GAAP EBITDA Margin Improvement

Non-GAAP EBITDA margin reached 16.2%, an increase of 14.3 percentage points year-over-year.

Negative Updates

Non-GAAP Operating Loss

The non-GAAP operating profit turned to a loss of RMB 55 million, with a negative operating margin of 2.8%.

Gross Margin Decline

Non-GAAP gross margin declined by 2.6 percentage points quarter-over-quarter to 16.6%.

Enterprise Cloud Revenue Decrease

Enterprise cloud revenue saw a 25% sequential decrease due to seasonal slowdowns in project delivery and acceptance.

Impact of Chip Ban

Potential mid to long-term impact on operations due to chip ban restrictions, although short-term effects are mitigated by existing inventory.

Company Guidance

During the Kingsoft Cloud Holdings Limited First Quarter 2025 Earnings Conference Call, key financial metrics were highlighted, showcasing the company's growth and strategic focus on AI. The company reported a year-over-year revenue growth of 11%, reaching RMB 1.97 billion, with public cloud revenue increasing by 14% to RMB 1.35 billion. AI gross billing surged over 200% year-over-year to RMB 525 million, contributing 39% of public cloud revenue. Despite some fluctuations, the non-GAAP gross profit was RMB 327 million, showing a 9.6% increase year-over-year, although the non-GAAP gross margin declined by 2.6 percentage points quarter-over-quarter to 16.6%. The non-GAAP operating loss was RMB 55 million, with an adjusted EBITDA margin of 16.2%, up from 1.9% the previous year. Additionally, capital expenditure reached RMB 605 million, and total adjusted operating expenses decreased by 9% year-over-year to RMB 427.3 million. The company remains optimistic about future growth, particularly in AI, while navigating market pressures and supply chain uncertainties.

Kingsoft Cloud Holdings Financial Statement Overview

Summary

Kingsoft Cloud Holdings shows moderate financial stability with improving gross profit margins and positive operating cash flow. However, ongoing net losses, negative free cash flow, and rising debt levels pose significant risks.

Income Statement

Neutral

Despite a recent increase in gross profit margin to 17.2% from 12.1% the previous year, Kingsoft Cloud Holdings faces challenges with negative EBIT and net profit margins, indicating ongoing operational inefficiencies. Revenue growth has been inconsistent, with a decline of 13.2% in 2022 followed by a recovery of 10.5% in 2023. These factors contribute to a moderate income statement score.

Balance Sheet

Neutral

The company's balance sheet shows a stable equity ratio of 29.4%, reflecting a solid capital structure. However, the debt-to-equity ratio has increased, signaling rising financial leverage. Return on equity remains negative due to persistent net losses, which highlights profitability concerns. Overall, the balance sheet is relatively stable but with some risk factors.

Cash Flow

Neutral

Kingsoft Cloud Holdings has shown improvement in operating cash flow, turning positive in 2023, indicating better cash management. However, free cash flow remains negative, albeit improved from prior years. The operating cash flow to net income ratio suggests cash generation is better than reported earnings, but continued negative free cash flow poses concerns for financial sustainability.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
7.98B	7.79B	7.05B	8.18B	9.06B	6.58B
	Gross Profit
1.37B	1.34B	850.17M	429.54M	351.29M	356.98M
	EBIT
-1.70B	-1.74B	-2.11B	-2.25B	-1.81B	-1.21B
	EBITDA
-859.25M	443.80M	-1.08B	-1.37B	-776.06M	-388.83M
	Net Income Common Stockholders
-1.92B	-1.97B	-2.18B	-2.69B	-1.59B	-962.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	2.74B	2.26B	4.67B	6.71B	6.12B
	Total Assets
0.00	17.59B	15.07B	17.32B	21.08B	11.96B
	Total Debt
0.00	5.20B	1.72B	1.17B	1.62B	612.27M
	Net Debt
0.00	2.55B	-532.82M	-2.25B	-2.60B	-2.81B
	Total Liabilities
0.00	12.09B	7.82B	7.73B	9.59B	3.72B
	Stockholders Equity
5.01B	5.17B	6.89B	8.80B	10.60B	8.24B
Cash Flow		Free Cash Flow
-3.15B	-3.05B	-2.13B	-1.25B	-1.44B	-1.88B
	Operating Cash Flow
531.37M	628.42M	-169.07M	188.97M	-708.87M	-290.43M
	Investing Cash Flow
-2.94B	-3.62B	-673.19M	-32.87M	-421.62M	-4.31B
	Financing Cash Flow
2.69B	3.26B	-227.85M	-1.15B	2.21B	6.12B

Kingsoft Cloud Holdings Technical Analysis

Technical Analysis Sentiment

Positive

Last Price13.33

Price Trends

50DMA

13.04

Positive

100DMA

14.52

Negative

200DMA

9.94

Positive

Market Momentum

MACD

-0.21

Negative

RSI

53.79

Neutral

STOCH

88.37

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KC, the sentiment is Positive. The current price of 13.33 is above the 20-day moving average (MA) of 12.67, above the 50-day MA of 13.04, and above the 200-day MA of 9.94, indicating a bullish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 53.79 is Neutral, neither overbought nor oversold. The STOCH value of 88.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KC.

Kingsoft Cloud Holdings Risk Analysis

Kingsoft Cloud Holdings disclosed 98 risk factors in its most recent earnings report. Kingsoft Cloud Holdings 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

Kingsoft Cloud Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YOU	74 Outperform	$3.39B	13.68	124.77%	1.96%	21.59%	223.84%
GTM	71 Outperform	$3.37B	81.42	2.23%	―	-3.12%	-37.59%
FRSH	71 Outperform	$4.61B	―	-6.85%	―	20.46%	39.37%
BILL	68 Neutral	$4.52B	482.28	0.97%	―	14.52%	―
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
ASAN	58 Neutral	$3.33B	―	-83.36%	―	9.84%	13.74%
KC	56 Neutral	$3.64B	―	-33.09%	―	13.85%	3.47%

* Technology Sector Average

Performance Comparison

Kingsoft Cloud Holdings

13.33

10.41

356.51%

BILL

Bill.com Holdings

43.97

-4.46

-9.21%

GTM

ZoomInfo Technologies

9.66

-2.72

-21.97%

ASAN

Asana

13.19

0.86

6.97%

YOU

Clear Secure

25.39

8.01

46.09%

FRSH

Freshworks

15.66

3.35

27.21%

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.