Prosus (PRX) AI Stock Analysis

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Prosus

(OTC:PRX)

Rating:69Neutral

Price Target:―

Prosus has shown strength in revenue growth and strategic initiatives, with a successful IPO and improving free cash flow. Challenges remain in profitability and cash flow consistency, but the company's focus on AI and ecosystem strategy is promising. Technical analysis suggests caution due to bearish indicators. Valuation appears attractive with a low P/E ratio, but modest dividend yield. Overall, the stock has potential for growth but faces notable challenges.

Positive Factors

Dividends

Growing free cash flow generation of the e-commerce portfolio has increased investor focus on whether Prosus could announce a plan for returning the Tencent dividend to shareholders.

Earnings Guidance

Prosus pre-announced FY25 adjusted EBIT of at least $435m, exceeding its previously announced ambition and significantly above market expectations.

Financial Performance

Mid-term profitability targets for the e-commerce portfolio are likely to be strong, with the CEO focused on driving profitability and potentially announcing an ambitious plan for the Classifieds and Food Delivery business.

Negative Factors

Investor Expectations

Analysts expect the shares to rise based on the positive announcement, which may lead to heightened investor expectations and potential volatility if future results do not meet these expectations.

Prosus (PRX) vs. iShares MSCI Netherlands ETF (EWN)

Market Cap

€103.28B

Dividend Yield0.2%

Average Volume (3M)2.72M

Price to Earnings (P/E)16.2

Beta (1Y)1.70

Revenue Growth13.77%

EPS GrowthN/A

CountryNL

Employees21,048

SectorCommunication Services

Sector Strength86

IndustryInternet Content & Information

Share Statistics

EPS (TTM)1.25

Shares Outstanding2,378,947,800

10 Day Avg. Volume3,087,311

30 Day Avg. Volume2,715,579

Financial Highlights & Ratios

PEG Ratio-0.85

Price to Book (P/B)12.80

Price to Sales (P/S)0.00

P/FCF Ratio-1.39K

Enterprise Value/Market Cap1.25

Enterprise Value/Revenue6.09

Enterprise Value/Gross Profit52.30

Enterprise Value/Ebitda-493.44

Forecast

1Y Price Target

€55.84

Price Target Upside16.68% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Prosus Business Overview & Revenue Model

Company DescriptionProsus N.V. engages in the e-commerce and internet businesses. The company operates internet platforms, such as classifieds, payments and fintech, food delivery, travel, education technology, etail, health, ventures, social, and other internet platforms. It has operations in Latin and North America, the Middle East, Africa, Europe, Asia, and internationally. The company was formerly known as Myriad International Holdings N.V. and changed its name to Prosus N.V. in August 2019. Prosus N.V. was incorporated in 1994 and is headquartered in Amsterdam, the Netherlands. Prosus N.V. is a subsidiary of Naspers Limited.

How the Company Makes MoneyProsus generates revenue primarily through its diverse portfolio of investments in technology and internet companies. A significant portion of its earnings comes from its stake in Tencent, which contributes through dividends and share appreciation. Additionally, Prosus owns and operates businesses in online classifieds, food delivery services, and fintech, which generate income through service fees, advertising, and transaction commissions. The company also benefits from strategic partnerships and investments in high-growth markets, enhancing its revenue streams through capital gains and returns on investment.

Prosus Earnings Call Summary

Earnings Call Date:Dec 02, 2024

(Q2-2025)

% Change Since: 24.15%|

Next Earnings Date:Jun 30, 2025

Earnings Call Sentiment Positive

The earnings call reflected a generally positive sentiment with robust revenue growth, significant EBIT improvement, and successful IPO and asset sales. The company's focus on AI and ecosystem strategy was highlighted as a potential driver for future growth. However, concerns about increased central costs and a lack of clarity in capital return policies were noted as challenges.

Q2-2025 Updates

Positive Updates

Strong Revenue Growth

Reported a 26% growth in revenue, showcasing strong performance across business segments.

Significant EBIT Increase

EBIT increased by 5 times, indicating improved operational efficiency.

Successful IPO and Asset Sales

Completed a $13 billion IPO and sold $2 billion in assets, strengthening the company's financial position.

Positive Free Cash Flow Growth

Free cash flow improved by 74%, with consolidated businesses contributing significantly.

Guidance Announcement

Provided first-time guidance with expectations of $6.2 billion in revenue and $400 million in EBIT for the year.

AI and Ecosystem Strategy

Focus on leveraging AI across the ecosystem to improve operations and develop new business models.

Negative Updates

Increased Central Costs

Reported an increase in central costs due to reallocation, impacting overall profitability.

Negative EBIT in OLX Brazil

OLX Brazil reported negative adjusted EBIT, attributed to increased investments in the period.

Challenges in Capital Allocation Communication

Concerns raised over the lack of a clear capital return policy, despite significant cash reserves.

Company Guidance

In the recent results call, the company provided several key metrics that outline its financial performance and strategic initiatives. The company reported a growth rate of 26% and a fivefold increase in EBIT. It recently executed a $13 billion IPO and sold $2 billion in assets. The company has $10 billion available for investment and is focused on strategic investments that leverage its ecosystem. For the first time, the company has given guidance for the year, projecting $6.2 billion in revenue and $400 million in EBIT. The call also highlighted the significant increase in free cash flow, which grew by 74%, and the company's commitment to disciplined investment and operational excellence. The company emphasized the importance of its ecosystem and culture, particularly in leveraging AI and innovation to drive future growth.

Prosus Financial Statement Overview

Summary

Prosus shows a mixed financial performance with strengths in revenue recovery and EBITDA performance, but challenges in profitability and cash flow consistency. The balance sheet remains stable with manageable leverage. Overall, the company needs to focus on improving profitability and maintaining positive cash flow trends.

Income Statement

Positive

The company's revenue has shown volatility, with a decrease from 2022 to 2023 but an increase from 2023 to 2024. Gross profit margin has improved in 2024, indicating better cost management. However, the net profit margin and EBIT margins are negative, reflecting challenges in profitability. EBITDA margin remains strong, suggesting potential for operational improvement.

Balance Sheet

Positive

The balance sheet is solid with a relatively high stockholders' equity compared to total assets, indicating financial stability. Debt-to-equity ratio is moderate, suggesting manageable leverage. However, the decline in stockholders' equity over the years and high net debt in 2023 are areas of concern.

Cash Flow

Neutral

Free cash flow has improved significantly in 2024 after negative years, indicating better cash management. Operating cash flow to net income ratio is stable, although fluctuations in operating cash flow in previous years highlight volatility. The company shows potential for cash flow stabilization.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
5.87B	5.47B	5.76B	6.87B	5.12B	3.33B
	Gross Profit
2.47B	2.22B	1.66B	2.06B	1.66B	1.15B
	EBIT
1.00M	-546.00M	-1.34B	-859.00M	-976.00M	-593.00M
	EBITDA
189.00M	7.75B	10.48B	8.82B	-831.00M	4.14B
	Net Income Common Stockholders
7.81B	6.61B	10.11B	18.73B	7.45B	3.77B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
18.99B	18.99B	20.87B	13.57B	6.03B	7.85B
	Total Assets
61.82B	61.82B	65.08B	71.34B	55.73B	35.76B
	Total Debt
16.24B	16.24B	16.27B	16.08B	8.20B	3.82B
	Net Debt
14.06B	14.06B	6.71B	6.43B	4.63B	-186.00M
	Total Liabilities
20.53B	20.53B	20.45B	20.82B	12.54B	6.45B
	Stockholders Equity
41.26B	41.26B	44.59B	50.42B	43.07B	29.10B
Cash Flow		Free Cash Flow
1.35B	978.00M	-383.00M	-847.00M	54.00M	-310.00M
	Operating Cash Flow
1.42B	1.04B	-120.00M	-605.00M	159.00M	-209.00M
	Investing Cash Flow
12.88B	209.00M	12.64B	4.39B	-3.22B	2.27B
	Financing Cash Flow
-6.89B	-8.12B	-12.45B	2.40B	2.45B	17.00M

Prosus Technical Analysis

Technical Analysis Sentiment

Positive

Last Price47.86

Price Trends

50DMA

42.72

Positive

100DMA

41.77

Positive

200DMA

39.66

Positive

Market Momentum

MACD

1.11

Negative

RSI

68.12

Neutral

STOCH

94.11

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL:PRX, the sentiment is Positive. The current price of 47.86 is above the 20-day moving average (MA) of 46.06, above the 50-day MA of 42.72, and above the 200-day MA of 39.66, indicating a bullish trend. The MACD of 1.11 indicates Negative momentum. The RSI at 68.12 is Neutral, neither overbought nor oversold. The STOCH value of 94.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NL:PRX.

Prosus Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRX	69 Neutral	€103.28B	16.20	18.12%	0.20%	13.77%	―
Sector *	61 Neutral	$14.60B	5.88	-4.32%	3.68%	2.75%	-30.55%
UMGNF		$57.28B	25.32	56.71%	1.80%	―	―

* Communication Services Sector Average

Performance Comparison

NL:PRX

Prosus

47.87

14.13

41.89%

UMGNF

Universal Music Group

31.15

1.21

4.04%

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.