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Royal KPN NV (KKPNY)
:KKPNY
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Royal KPN
(OTC:KKPNY)
73Outperform
Royal KPN (KKPNY) vs. S&P 500 (SPY)
Market Cap
$17.15B
Dividend Yield3.23%
Average Volume (3M)327.87K
Price to Earnings (P/E)18.7
Beta (1Y)0.23
Revenue Growth3.64%
EPS Growth2.22%
CountryUS
Employees6,887
SectorCommunication Services
Sector Strength59
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.23
Shares Outstanding3,888,930,400
10 Day Avg. Volume504,318
30 Day Avg. Volume327,867
Financial Highlights & Ratios
PEG Ratio7.96
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
$4.35Price Target Upside-1.14% Downside
Rating ConsensusHold
Number of Analyst Covering0
Royal KPN Business Overview & Revenue Model
Company DescriptionRoyal KPN N.V. (KKPNY) is a leading telecommunications and IT provider based in the Netherlands. The company operates primarily in the sectors of fixed and mobile telephony, internet services, and television. KPN offers a range of services to both consumer and business customers, including broadband internet, mobile phone services, IPTV, and data network solutions. With a strong focus on innovation, KPN aims to deliver high-quality connectivity and digital solutions that cater to the evolving needs of its customers.
How the Company Makes MoneyRoyal KPN makes money through a variety of revenue streams. The primary sources of revenue include subscription fees for its fixed-line and mobile telecommunication services, where customers pay for monthly access to phone and internet services. Additionally, KPN generates income from its television and IPTV services, which offer a range of digital content and streaming options. The company also earns revenue from business solutions, providing IT and network services to corporate clients, such as cloud services, cybersecurity solutions, and data center services. Partnerships with content providers, technology firms, and network infrastructure companies further enhance KPN's offerings and contribute to its revenue growth. Furthermore, KPN benefits from interconnection fees charged to other telecom operators for using its network. Overall, the combination of consumer and business services underpins KPN's financial performance.
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
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.75
Positive
Balance Sheet
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.68
Positive
Cash Flow
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.80
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| 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
Positive
4.40
Price Trends
3.86
Positive
3.79
Positive
3.88
Positive
Market Momentum
0.10
Negative
68.26
Neutral
86.25
Negative
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 4.4 is above the 20-day moving average (MA) of 4.12, above the 50-day MA of 3.86, and above the 200-day MA of 3.88, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 68.26 is Neutral, neither overbought nor oversold. The STOCH value of 86.25 is Negative, 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $305.86B | 27.72 | 17.93% | 1.14% | 3.62% | 38.24% | |
76 Outperform | $205.30B | 19.17 | 10.54% | 3.88% | -0.08% | -24.48% | |
73 Outperform | $17.15B | 18.69 | 33.56% | 3.23% | 3.64% | 2.22% | |
73 Outperform | $192.05B | 11.00 | 18.27% | 5.88% | 0.61% | 50.39% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
47 Neutral | $3.94B | ― | -12.49% | ― | -9.95% | 99.47% | |
41 Neutral | $699.97M | ― | -4.05% | 0.78% | 14.16% | -443.30% |
* Communication Services Sector Average
Performance Comparison
KKPNY
Royal KPN
4.40
0.86
24.29%
T
AT&T
26.64
10.18
61.85%
LUMN
Lumen Technologies
3.27
1.93
144.03%
SHEN
Shenandoah Telecommunications Co
12.35
-3.55
-22.33%
VZ
Verizon
43.03
3.57
9.05%
TMUS
T Mobile US
248.11
89.24
56.17%
Royal KPN Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: 17.96% | Next Earnings Date: Apr 24, 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.