Xunlei (XNET) AI Stock Analysis

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Xunlei

(NASDAQ:XNET)

Rating:77Outperform

Price Target:

$9.00

▲(24.48% Upside)

Xunlei's stock is rated positively due to its undervaluation and strong technical momentum. Despite financial performance concerns, particularly in profitability and operational efficiency, the stock's low P/E ratio and bullish technical indicators suggest potential for growth. The earnings call provided a mixed outlook, with strong revenue growth but increased costs and segment losses.

Xunlei (XNET) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$452.30M

Dividend YieldN/A

Average Volume (3M)1.25M

Price to Earnings (P/E)0.6

Beta (1Y)1.13

Revenue Growth11.31%

EPS Growth5084.80%

CountryUS

Employees1,216

SectorTechnology

Sector Strength87

IndustryAdvertising Agencies

Share Statistics

EPS (TTM)11.52

Shares Outstanding62,372,066

10 Day Avg. Volume2,270,659

30 Day Avg. Volume1,251,891

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap0.11

Enterprise Value/Revenue0.15

Enterprise Value/Gross Profit0.30

Enterprise Value/Ebitda-3.09

Forecast

1Y Price Target

$9.00

Price Target Upside24.48% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Xunlei Business Overview & Revenue Model

Company DescriptionXunlei Limited (XNET) is a leading technology company based in China, primarily known for its innovative cloud-based services and peer-to-peer file-sharing technology. Founded in 2003, Xunlei operates in the digital content delivery and online services sectors, offering a range of products including download acceleration software, cloud storage solutions, and blockchain-related services. The company aims to enhance the efficiency of internet services while providing value-added services to both individual users and businesses.

How the Company Makes MoneyXunlei generates revenue through multiple streams, primarily by offering paid subscription services for its cloud storage and file-sharing solutions. The company also monetizes its user base through advertising on its platforms, where businesses can promote their products and services. Additionally, Xunlei has ventured into blockchain technology, creating revenue opportunities through cryptocurrency-related services and partnerships with other technology firms. Significant partnerships with internet service providers and content companies further bolster its revenue model by allowing Xunlei to provide integrated services and expand its market reach.

Xunlei Earnings Call Summary

Earnings Call Date:Aug 14, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 13, 2025

Earnings Call Sentiment Positive

Xunlei's Q2 2025 earnings call presented a positive outlook with significant revenue growth across multiple segments, successful strategic acquisitions, and strong guidance for the next quarter. However, there were challenges such as increased costs, decreased gross profit margin, and ongoing losses in key segments, which tempered the overall positive sentiment.

Q2-2025 Updates

Positive Updates

Acquisition of Hupu

Successfully acquired Hupu, a leading online community for sports enthusiasts, expanding Xunlei's reach into new user segments and content domains.

IPO of Arashi Vision Inc.

Highlighted strategic investment capabilities with the IPO of Arashi Vision Inc., resulting in approximately $720 million in unrealized pretax capital gains.

Revenue Growth

Reported year-over-year revenue growth of 30.6%, driven by strong performance across key business segments.

Subscription Business Growth

Subscription revenue reached $36.4 million, a 10.5% increase compared to the same period in 2024, with subscribers reaching a record 6.4 million.

Live Streaming Revenue Surge

Live streaming and other services achieved a strong year-over-year revenue growth of 85.5%, reaching $37.6 million.

Cloud Computing Revenue Increase

Cloud computing revenue grew by 13.6% year-over-year, reaching $30 million, reflecting recovery from previous setbacks and increased demand.

Guidance for Q3 2025

Estimated total revenues for Q3 2025 to be between $116 million and $124 million, a quarter-over-quarter increase of approximately 15.4%.

Negative Updates

Increased Costs

Cost of revenues increased to $52.3 million, representing 50.3% of total revenues, mainly due to higher bandwidth costs and revenue sharing expenses.

Decreased Gross Profit Margin

Gross profit margin decreased to 49.3% from 51.1% in the same period of 2024, mainly due to decreased gross profit margin in the cloud computing business.

Ongoing Losses in Key Segments

Live streaming and cloud computing businesses are still in the growth stage and continue to report losses despite revenue growth.

Increased Sales and Marketing Expenses

Sales and marketing expenses rose to $21.6 million, representing 20.8% of total revenues, up from $10.9 million or 13.7% in the same period of 2024.

Company Guidance

During Xunlei's Q2 2025 earnings call, the company reported a significant year-over-year revenue growth of 30.6%, reaching a total revenue of $104 million. Key metrics included a 10.5% increase in subscription revenue to $36.4 million, driven by a subscriber base that expanded to 6.4 million, with an average revenue per subscriber of RMB 40.8. The live streaming and other services sector saw remarkable growth of 85.5%, contributing $37.6 million, bolstered by the acquisition of Hupu. Cloud computing revenue increased by 13.6% to $30 million, reflecting recovery and rising client demand. Despite increased costs, the gross profit reached $51.2 million, with a margin of 49.3%. The company also recorded a substantial net income of $727.4 million, largely due to gains from its investment in Arashi Vision Inc. Looking ahead, Xunlei anticipates Q3 2025 revenues to range between $116 million and $124 million, driven by strong performances across its business segments.

Xunlei Financial Statement Overview

Summary

Xunlei demonstrates a stable financial position with strong equity and manageable debt levels. However, profitability remains a concern with fluctuating margins and inconsistent revenue growth. The company shows potential in cash flow management, but needs to address operational inefficiencies to enhance profitability and sustain growth.

Income Statement

Positive

Xunlei has shown a mixed performance in its income statement. The gross profit margin has been relatively stable, indicating consistent cost management. However, the net profit margin has fluctuated, with recent periods showing a decline in profitability. Revenue growth has been inconsistent, with a notable decline in the most recent year. The company struggles with negative EBIT margins, indicating operational challenges, though EBITDA margins show some improvement, suggesting better cash flow management.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with a favorable equity ratio, indicating financial stability. The debt-to-equity ratio is low, suggesting conservative leverage. However, the return on equity has been volatile, reflecting inconsistent profitability. Overall, the company maintains a solid asset base with manageable liabilities.

Cash Flow

Neutral

Cash flow analysis reveals a positive trend in operating cash flow, indicating improved cash generation from operations. Free cash flow has shown growth, but the free cash flow to net income ratio highlights some inefficiencies in converting earnings to cash. The company has managed capital expenditures prudently, supporting free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	331.61M	323.14M	363.72M	341.50M	238.78M	186.37M
Gross Profit	168.84M	167.57M	163.07M	141.44M	120.18M	93.73M
EBITDA	-16.42M	5.30M	25.99M	29.32M	10.46M	1.59M
Net Income	-3.22M	1.22M	14.22M	21.46M	1.19M	-14.14M
Balance Sheet
Total Assets	485.86M	473.90M	468.69M	463.32M	440.72M	415.61M
Cash, Cash Equivalents and Short-Term Investments	274.57M	287.54M	271.88M	262.32M	239.01M	255.07M
Total Debt	28.37M	29.63M	22.95M	32.36M	20.19M	21.91M
Total Liabilities	168.63M	156.12M	145.21M	154.90M	138.95M	125.23M
Stockholders Equity	317.64M	318.06M	324.86M	309.89M	303.65M	292.15M
Cash Flow
Free Cash Flow	0.00	22.63M	21.23M	36.13M	6.19M	-27.52M
Operating Cash Flow	0.00	30.98M	25.72M	51.11M	19.48M	-13.91M
Investing Cash Flow	0.00	-21.91M	-23.90M	11.76M	-32.62M	-20.76M
Financing Cash Flow	0.00	-925.00K	-13.52M	6.64M	-223.00K	2.68M

Xunlei Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.23

Price Trends

50DMA

5.16

Positive

100DMA

4.95

Positive

200DMA

3.93

Positive

Market Momentum

MACD

0.63

Negative

RSI

63.14

Neutral

STOCH

29.53

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XNET, the sentiment is Positive. The current price of 7.23 is above the 20-day moving average (MA) of 6.05, above the 50-day MA of 5.16, and above the 200-day MA of 3.93, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 63.14 is Neutral, neither overbought nor oversold. The STOCH value of 29.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XNET.

Xunlei Risk Analysis

Xunlei disclosed 78 risk factors in its most recent earnings report. Xunlei reported the most risks in the "Legal & Regulatory" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Xunlei Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
XNET	77 Outperform	$452.30M	0.63	105.35%	―	11.31%	5084.80%
Sector *	61 Neutral	$35.48B	7.63	-10.11%	1.88%	8.73%	-9.23%
WIMI	60 Neutral	$39.58M	7.94	8.21%	―	-8.74%	―
TZOO	58 Neutral	$107.72M	10.94	494.69%	―	3.47%	-0.61%
ADV	51 Neutral	$593.22M	―	-36.12%	―	-10.21%	-81.84%
MCHX	45 Neutral	$86.59M	―	-13.93%	―	-2.64%	6.48%
VSME	31 Underperform	$110.53M	―	-157.27%	―	―	―

* Technology Sector Average

Performance Comparison

XNET

Xunlei

7.23

5.65

357.59%

MCHX

Marchex

1.96

-0.01

-0.51%

TZOO

Travelzoo

9.81

-1.18

-10.74%

WIMI

WiMi Hologram Cloud

4.03

-3.41

-45.83%

ADV

Advantage Solutions

1.82

-1.92

-51.34%

VSME

VS Media Holdings Limited Class A

2.23

1.31

142.39%

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.Date of analysis: Aug 20, 2025