IHS Holding (IHS) AI Stock Analysis

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IHS Holding

(NYSE:IHS)

57Neutral

IHS Holding demonstrates strong technical momentum and positive earnings call highlights, suggesting short-term optimism. However, significant financial performance challenges, such as declining revenue and negative profitability, weigh heavily on the overall score. The valuation metrics further underscore the need for caution, with a negative P/E ratio and no dividend yield presenting challenges for long-term investors.

Positive Factors

Financial performance

IHS is making clear progress on improving margins and returning to FCF/share growth in 2025 as it shores up profitability.

Strategic objectives

Continued execution toward its strategic objectives is viewed as positive, maintaining a positive long-term view of IHS as a compelling way to play emerging market growth.

Negative Factors

Asset divestment

The potential to divest certain assets at accretive multiples could be a positive catalyst for a stock that trades significantly below fair value.

IHS Holding (IHS) vs. S&P 500 (SPY)

Market Cap

$1.81B

Dividend YieldN/A

Average Volume (3M)621.49K

Price to Earnings (P/E)―

Beta (1Y)1.07

Revenue Growth-19.49%

EPS Growth16.08%

CountryUS

Employees2,864

SectorCommunication Services

Sector Strength84

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.73

Shares Outstanding333,440,950

10 Day Avg. Volume629,144

30 Day Avg. Volume621,492

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap2.46

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit5.43

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.35

Price Target Upside40.57% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

IHS Holding Business Overview & Revenue Model

Company DescriptionIHS Holding (IHS) is a leading provider of telecommunications infrastructure, primarily focusing on the development, ownership, and operation of tower sites. The company operates in emerging markets across Africa, Latin America, and the Middle East, offering mobile network operators (MNOs) and other wireless service providers access to its extensive portfolio of towers for hosting their equipment, thereby facilitating efficient and reliable network coverage.

How the Company Makes MoneyIHS Holding generates revenue primarily through leasing space on its telecommunications towers to mobile network operators and other wireless service providers. This lease-based model allows MNOs to install their equipment on IHS's infrastructure, enabling them to expand and improve their network coverage without the capital expenditure associated with building their own towers. The company generally enters into long-term contracts with its clients, ensuring a stable and recurring revenue stream. Additionally, IHS may derive income from offering ancillary services such as maintenance, energy management, and site security to its tenants. Strategic partnerships with key telecommunications companies and expansion into new geographic regions also contribute to the company's growth and revenue.

IHS Holding Financial Statement Overview

Summary

IHS Holding faces significant financial challenges, with declining revenues, negative profitability, and an alarming balance sheet position characterized by negative equity. Despite some positive cash flow aspects, the overall financial health suggests potential risks and the need for strategic interventions to enhance liquidity and profitability.

Income Statement

Neutral

IHS Holding shows declining revenue and margins over recent years. The gross profit margin for 2024 is 47.96%, but the significant net losses and an EBITDA margin of -46.46% indicate operational inefficiencies. Revenue has decreased from 2023 to 2024, highlighting potential market or operational challenges.

Balance Sheet

Negative

The balance sheet reveals a concerning negative stockholders' equity in 2024, indicative of potential insolvency risk. The debt-to-equity ratio is not calculable due to negative equity, and liabilities exceed assets, raising alarms about financial stability. The equity ratio is negative due to the negative equity position, further emphasizing the financial distress.

Cash Flow

Neutral

While IHS Holding has managed to generate positive operating cash flow, indicating some operational cash generation capability, the free cash flow growth is volatile. The free cash flow to net income ratio is favorable due to substantial non-cash losses, but consistent capital expenditures and financing outflows highlight cash management challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.71B	2.13B	1.96B	1.58B	1.40B
	Gross Profit
820.69M	1.04B	804.41M	672.34M	564.73M
	EBIT
479.15M	530.65M	-141.07M	31.01M	331.94M
	EBITDA
-794.75M	-998.47M	252.65M	591.49M	468.08M
	Net Income Common Stockholders
-1.63B	-1.98B	-470.40M	-26.12M	-322.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
577.96M	293.82M	514.08M	916.49M	585.42M
	Total Assets
4.28B	5.36B	6.32B	5.47B	4.45B
	Total Debt
3.90B	4.11B	3.95B	2.99B	2.52B
	Net Debt
3.32B	3.82B	3.43B	2.07B	1.93B
	Total Liabilities
4.57B	5.02B	4.96B	3.75B	3.22B
	Stockholders Equity
-454.58M	109.85M	1.13B	1.58B	1.21B
Cash Flow		Free Cash Flow
460.29M	254.68M	347.93M	347.71M	406.06M
	Operating Cash Flow
729.30M	853.45M	907.30M	750.19M	635.26M
	Investing Cash Flow
63.18M	-722.25M	-1.52B	-877.95M	-758.51M
	Financing Cash Flow
-431.00M	-162.30M	398.24M	524.26M	-128.14M

IHS Holding Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.94

Price Trends

50DMA

4.63

Positive

100DMA

4.04

Positive

200DMA

3.55

Positive

Market Momentum

MACD

0.23

Negative

RSI

67.76

Neutral

STOCH

89.40

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IHS, the sentiment is Positive. The current price of 5.94 is above the 20-day moving average (MA) of 4.99, above the 50-day MA of 4.63, and above the 200-day MA of 3.55, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 67.76 is Neutral, neither overbought nor oversold. The STOCH value of 89.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IHS.

IHS Holding Risk Analysis

IHS Holding disclosed 81 risk factors in its most recent earnings report. IHS Holding 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

IHS Holding Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDT	77 Outperform	$1.33B	16.60	33.05%	0.40%	1.75%	116.54%
Sector *	60 Neutral	$13.74B	7.25	-2.74%	3.81%	2.21%	-37.97%
IHS	57 Neutral	$1.81B	―	493.63%	―	-19.49%	16.08%
CABO	54 Neutral	$1.03B	59.21	-1.12%	6.45%	-6.30%	-109.90%
ATUS	52 Neutral	$1.24B	―	21.93%	―	-3.06%	-290.86%
LILA	50 Neutral	$1.09B	―	-45.55%	―	-1.31%	-1163.93%
LILAK	45 Neutral	$1.09B	―	-57.56%	―	-1.31%	-1163.93%

* Communication Services Sector Average

Performance Comparison

IHS

IHS Holding

5.71

1.76

44.56%

IDT

53.58

15.50

40.70%

LILA

Liberty Global LiLAC

4.67

-4.00

-46.14%

CABO

Cable ONE

173.02

-206.20

-54.37%

LILAK

Liberty LiLAC Group

4.68

-4.01

-46.14%

ATUS

Altice Usa

2.77

0.67

31.90%

IHS Holding Earnings Call Summary

Earnings Call Date:Mar 18, 2025

(Q4-2024)

% Change Since: 51.92%|

Next Earnings Date:May 20, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive overall sentiment, with strong revenue and EBITDA growth, successful strategic initiatives, and effective debt management outweighing the negative impacts of currency volatility and specific regional challenges.

Q4-2024 Updates

Positive Updates

Strong Revenue and EBITDA Performance

IHS Holding Limited reported 48% organic revenue growth for 2024, with 6.5% constant currency growth. The adjusted EBITDA reached $928 million, with a margin of 54.3%, up 100 basis points compared to 2023.

CapEx Optimization and Cash Flow Improvement

CapEx was significantly reduced by 56% year-over-year, driving an adjusted levered free cash flow (ALFCF) of $304 million, ahead of guidance.

Leverage Reduction and Strategic Refinancing

Net leverage ratio decreased to 3.7 times from 3.9 times. Significant refinancing efforts included $1.6 billion of debt refinancing to extend maturities and shift debt into local currencies.

Successful Asset Disposal

The sale of IHS Kuwait operations at 14.2 times adjusted EBITDA after leases, highlighting potential undervaluation of IHS assets.

Contract Renewals and Revenue Visibility

Extended commercial contracts with key customers MTN and Airtel, covering over 25,000 tenancies, with 72% of group revenue renewed or extended, improving financial visibility.

Negative Updates

Negative Revenue Impact from FX Volatility

Despite strong organic growth, reported revenue declined by approximately 14% year-on-year in Q4 2024 due to significant naira depreciation and new financial terms with MTN Nigeria.

Decreased Colocation Rate in Nigeria

Colocation rate decreased to 1.56 times from 1.59 times in Q4 2023, due to reintegrated towers and tenant churn.

Higher Interest Costs

ALFCF was negatively impacted by increased interest costs following the November bond refinancing.

Partial Revenue Decline in LatAm

Revenue in the LatAm segment decreased by 18% due to FX movements and reduced revenue recognition from Oi.

Company Guidance

During the IHS Holding Limited fourth quarter and full year 2024 earnings call, the company reported strong financial performance, surpassing their guidance for key metrics such as revenue, adjusted EBITDA, and adjusted levered free cash flow (ALFCF). Revenue saw a 48% organic growth, driven by a 6.5% constant currency growth and benefits from foreign exchange resets and power indexation. Adjusted EBITDA reached $928 million with a margin of 54.3%, up 100 basis points from 2023, and ALFCF was $304 million, both exceeding expectations. Capital expenditures were below anticipated levels, and the consolidated net leverage ratio decreased to 3.7x by year-end. The company highlighted strategic initiatives, including contract extensions with key customers, resulting in renewed or extended 72% of group revenue, and improved cash flow generation due to reduced withholding tax rates in Nigeria. For 2025, IHS expects continued organic revenue growth, increased adjusted EBITDA and ALFCF, and aims for further deleveraging through asset disposals.

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.