Royal KPN (KKPNY) AI Stock Analysis

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Royal KPN

(OTC:KKPNY)

77Outperform

Royal KPN's overall stock score of 77 reflects its strong financial performance and positive technical indicators, which suggest continued upward momentum. While high leverage is a potential risk, the company maintains effective cash flow management and operational efficiency. The valuation is reasonable, supported by a good dividend yield, making the stock appealing for both growth and income investors.

Royal KPN (KKPNY) vs. S&P 500 (SPY)

Market Cap

$17.71B

Dividend Yield3.12%

Average Volume (3M)566.13K

Price to Earnings (P/E)19.4

Beta (1Y)0.27

Revenue Growth3.07%

EPS Growth2.35%

CountryUS

Employees6,887

SectorCommunication Services

Sector Strength80

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.23

Shares Outstanding3,888,930,400

10 Day Avg. Volume825,074

30 Day Avg. Volume566,126

Financial Highlights & Ratios

PEG Ratio8.27

Price to Book (P/B)N/A

Price to Sales (P/S)2.51

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

$4.35

Price Target Upside-4.81% Downside

Rating ConsensusHold

Number of Analyst Covering0

Royal KPN Business Overview & Revenue Model

Company DescriptionKoninklijke KPN N.V. provides telecommunications and information technology (IT) services in the Netherlands. It operates through Consumer; Business; Wholesale; and Network, Operations & IT segments. The company offers fixed and mobile telephony, fixed and mobile broadband internet, and television services to retail consumers; infrastructure and network related IT solutions to business customers; and wholesale network services to third parties. It also provides IT services, includes cloud and workspace, and cybersecurity; and interconnect traffic, visitor roaming, digital products, and NL-ix, an interconnect exchange, as well as sells handsets and peripheral equipment, and software licenses. The company was founded in 1881 and is headquartered in Rotterdam, the Netherlands.

How the Company Makes MoneyRoyal KPN generates revenue through a diversified portfolio of telecommunications services. The company's primary revenue streams include fixed-line services, such as broadband internet and television subscriptions, and mobile services, including voice, data, and messaging. KPN also earns income from business solutions, offering ICT services such as cloud computing, cybersecurity, and data management to corporate clients. Additionally, KPN leverages strategic partnerships and investments in infrastructure to enhance its service offerings and expand its market presence. The combination of these revenue streams allows KPN to maintain a strong financial performance and support its ongoing business growth and innovation efforts.

Royal KPN Financial Statement Overview

Summary

Royal KPN shows strong profitability and cash flow generation with a robust gross profit margin and improved net profit margin. However, the high debt-to-equity ratio and declining gross profit trend are concerns.

Income Statement

Positive

Royal KPN shows a steady revenue base with a slight revenue growth of 2.2% from 2022 to 2023. The gross profit margin is robust at 53.8%, indicating efficient cost management. Net profit margin has improved to 15.5% from 14.3% in 2022, reflecting enhanced profitability. EBIT and EBITDA margins are strong at 24.7% and 47.1%, respectively, showing solid operational performance. However, a declining gross profit trend from 2021 is a concern.

Balance Sheet

Positive

The company maintains a high debt-to-equity ratio of 1.91, highlighting significant leverage, which poses a risk. Return on equity stands at 23.7%, indicating good profitability on shareholder investment. The equity ratio of 29% suggests a moderate reliance on equity financing. While the company is stable, the high leverage could impact financial flexibility.

Cash Flow

Positive

Operating cash flow is strong, covering net income comfortably with a ratio of 2.66. Free cash flow shows a positive growth rate of 1.1%, ensuring liquidity for future investments. The free cash flow to net income ratio of 1.18 demonstrates effective cash generation. Overall, cash flows are solid, supporting operational and strategic needs.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
6.89B	5.44B	5.32B	5.27B	5.28B	5.50B
	Gross Profit
3.13B	2.92B	4.08B	4.09B	4.00B	4.32B
	EBIT
1.78B	1.34B	1.21B	1.86B	912.00M	1.04B
	EBITDA
3.22B	2.56B	2.55B	3.31B	2.44B	2.50B
	Net Income Common Stockholders
1.06B	844.00M	760.00M	1.29B	560.00M	624.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.09B	828.00M	527.00M	1.11B	867.00M	1.04B
	Total Assets
13.01B	12.25B	11.96B	12.74B	12.08B	12.30B
	Total Debt
8.66B	6.79B	6.29B	7.62B	7.44B	7.59B
	Net Debt
8.07B	6.18B	5.89B	6.82B	6.84B	6.82B
	Total Liabilities
11.13B	8.69B	8.31B	9.51B	9.46B	9.80B
	Stockholders Equity
1.88B	3.56B	3.65B	3.23B	2.62B	2.51B
Cash Flow		Free Cash Flow
1.40B	993.00M	982.00M	908.00M	479.00M	892.00M
	Operating Cash Flow
2.81B	2.24B	2.19B	2.13B	2.04B	2.01B
	Investing Cash Flow
-2.09B	-1.43B	-1.08B	-1.21B	-1.54B	-707.00M
	Financing Cash Flow
61.00M	-606.00M	-1.50B	-717.00M	-670.00M	-1.15B

Royal KPN Technical Analysis

Technical Analysis Sentiment

Positive

Last Price4.57

Price Trends

50DMA

4.00

Positive

100DMA

3.81

Positive

200DMA

3.86

Positive

Market Momentum

MACD

0.17

Negative

RSI

63.98

Neutral

STOCH

70.15

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KKPNY, the sentiment is Positive. The current price of 4.57 is above the 20-day moving average (MA) of 4.29, above the 50-day MA of 4.00, and above the 200-day MA of 3.86, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 63.98 is Neutral, neither overbought nor oversold. The STOCH value of 70.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KKPNY.

Royal KPN Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KKPNY	77 Outperform	$17.71B	19.41	33.56%	3.12%	3.07%	2.35%
VIV	77 Outperform	$13.93B	13.70	7.95%	2.59%	-0.47%	1.69%
TLK	73 Outperform	$15.50B	10.56	16.99%	5.35%	-2.99%	-7.36%
AMX	72 Outperform	$52.33B	34.07	7.78%	3.01%	3.15%	-63.12%
VOD	71 Outperform	$23.23B	9.08	4.31%	7.48%	-24.84%	-74.77%
TEF	64 Neutral	$27.98B	―	<0.01%	4.85%	1.18%	―
Sector *	58 Neutral	$13.61B	6.75	-2.45%	3.85%	2.33%	-35.55%

* Communication Services Sector Average

Performance Comparison

KKPNY

Royal KPN

4.57

1.04

29.46%

AMX

America Movil

17.10

-1.17

-6.40%

TLK

PT Telekomunikasi Indonesia Tbk

15.88

-2.29

-12.60%

VIV

Telefonica Brasil

9.54

0.67

7.55%

TEF

Telefonica

4.93

0.67

15.73%

VOD

Vodafone

9.31

1.32

16.52%

Royal KPN Earnings Call Summary

Earnings Call Date: Apr 24, 2025 | % Change Since: 0.44% | Next Earnings Date: Jul 23, 2025

Earnings Call Sentiment Neutral

KPN delivered strong revenue growth across all segments, with significant achievements in fiber expansion and mobile subscriber growth. However, challenges such as a slight decline in EBITDA margin and competitive pressures in the market were noted. The sentiment is balanced by robust financial performance and strategic advancements.

Highlights

Solid Revenue Growth Across Segments

Group service revenues increased by 3.4% organically in Q3, with growth in all segments. Consumer growth driven by postpaid inflow and fiber revenue, business segment also performed strongly.

Fiber Expansion

KPN, along with its joint venture Glaspoort, increased its fiber footprint, covering 62% of the Netherlands, with plans to reach 64% by the year-end and 80% by the end of 2026.

Mobile and B2B Growth

Mobile postpaid base grew by 45,000 subscribers, leading to a 6.7% service revenue growth. B2B segment reported growth across all segments, notably in SME and IoT services.

Financial Performance

Adjusted revenues for Q3 increased by 4.2% year-on-year. Free cash flow remained stable compared to the previous year, with a solid balance sheet and cash position of EUR 590 million.

Lowlights

Slight EBITDA Margin Decline

EBITDA margin decreased to 45.3% from the previous year, attributed to higher operating costs and rate indexation.

Net Promoter Score Pressure

Both consumer and B2B segments faced pressure on Net Promoter Scores, attributed to rising costs of living and macroeconomic conditions.

Competitive Environment Impact

Competition in the Dutch market, especially in the fiber and mobile segments, remains aggressive, impacting fixed service revenues.

Company Guidance

In the KPN Third Quarter 2024 Earnings Call, the company provided detailed guidance on its financial and operational performance metrics. Joost Farwerck, CEO, reported a 3.4% organic increase in group service revenues across all segments, underscoring strong consumer postpaid inflow and fiber revenue growth. The company achieved healthy EBITDA growth, with year-to-date free cash flow remaining stable compared to the previous year. KPN aims to expand its fiber footprint to 64% of Dutch households by the end of the year, with a long-term goal of 80% by 2026, anticipating a significant reduction in CapEx thereafter. The company reiterated its ambition to achieve a 3% annual growth in service revenue and adjusted EBITDA, alongside a 7% growth in free cash flow. The adjusted EBITDA margin was noted at 45.3%, with the year-to-date operational free cash flow increasing by 6%, driven primarily by EBITDA growth. KPN's leverage ratio was reported at 2.5x net debt to EBITDA, with expectations to reduce this to 2.4x by year-end. The company's strategic focus remains on quality improvement and customer satisfaction, as well as maintaining competitive positioning in both consumer and business segments.

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.