Royal KPN (KKPNY) AI Stock Analysis

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Royal KPN

(OTC:KKPNY)

Rating:78Outperform

Price Target:―

KPN benefits from strong financial performance, with consistent growth and profitability supported by strategic initiatives. Technical indicators show positive momentum, enhancing the stock's attractiveness. While valuation is fair, the solid dividend yield adds appeal. The recent earnings call highlights growth potential despite short-term challenges, supporting an overall positive outlook.

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

Market Cap

$18.30B

Dividend Yield3.16%

Average Volume (3M)586.54K

Price to Earnings (P/E)20.3

Beta (1Y)0.22

Revenue Growth3.07%

EPS Growth2.35%

CountryUS

Employees9,718

SectorCommunication Services

Sector Strength89

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.05

Shares Outstanding3,888,930,400

10 Day Avg. Volume915,537

30 Day Avg. Volume586,545

Financial Highlights & Ratios

PEG Ratio3.35

Price to Book (P/B)3.90

Price to Sales (P/S)0.00

P/FCF Ratio10.39

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-8.81% 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 Price4.77

Price Trends

50DMA

4.38

Positive

100DMA

4.01

Positive

200DMA

3.94

Positive

Market Momentum

MACD

0.10

Negative

RSI

64.96

Neutral

STOCH

94.67

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 4.77 is above the 20-day moving average (MA) of 4.59, above the 50-day MA of 4.38, and above the 200-day MA of 3.94, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 64.96 is Neutral, neither overbought nor oversold. The STOCH value of 94.67 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIV	81 Outperform	$15.92B	15.71	7.95%	3.88%	-5.69%	-0.05%
KKPNY	78 Outperform	$18.30B	20.26	33.56%	3.16%	3.07%	2.35%
TLK	76 Outperform	$16.40B	11.33	16.28%	5.00%	-5.14%	-7.47%
VOD	71 Outperform	$25.87B	9.21	-7.17%	6.65%	-24.84%	-74.77%
AMX	71 Outperform	$53.54B	32.14	8.54%	2.88%	0.19%	-49.68%
TEF	64 Neutral	$29.57B	―	-0.55%	4.56%	1.18%	―
Sector *	60 Neutral	$14.12B	6.43	-3.56%	3.69%	2.49%	-35.43%

* Communication Services Sector Average

Performance Comparison

KKPNY

Royal KPN

4.77

1.16

32.13%

AMX

America Movil

17.56

-1.05

-5.64%

TLK

PT Telekomunikasi Indonesia Tbk

16.74

-1.41

-7.77%

VIV

Telefonica Brasil

9.78

1.52

18.40%

TEF

Telefonica

5.20

0.93

21.78%

VOD

Vodafone

10.47

1.76

20.21%

Royal KPN Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 4.84%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The call reflected a balanced performance with strong growth in service revenues and EBITDA, but challenges in free cash flow and net profits due to specific one-off costs. The company showed resilience in the face of economic uncertainties and highlighted strategic efforts to improve customer satisfaction and reduce churn.

Q1-2025 Updates

Positive Updates

Solid Group Service Revenue Growth

Service revenues increased by 3.8% year-on-year, with Consumer service revenues up by 4.6% and Business segment revenues growing by 5.1%.

EBITDA Growth and Margin Expansion

Adjusted EBITDA after leases grew by 4.7%, with an EBITDA margin increase of 72 basis points to 44.7%.

Fiber Expansion

Fiber footprint expanded by 100,000 homes, now covering 64% of Dutch households.

Operational Free Cash Flow Increase

Operational free cash flow increased by 12% year-on-year, supported by contributions from Althio and Youfone.

Award for Best Mobile Network

KPN received an award from Umlaut for having the Best Mobile Network in the Netherlands.

Negative Updates

Free Cash Flow Decline

Free cash flow decreased by 70% or €26 million compared to last year, due to higher interest payments and phasing of working capital.

Net Profit Decrease

Reported net profits decreased despite EBITDA growth, due to one-off costs related to the Althio transaction.

Consumer Net Promoter Score Decline

Consumer Net Promoter Score declined, influenced by challenging consumer sentiment at the start of the year.

Challenges in LCE Service Revenue Growth

LCE service revenues remain stable, with some price pressure in mobile.

Company Guidance

During KPN's Q1 2025 earnings call, the company reported a 3.8% increase in group service revenues, with notable contributions from Youfone and mobile services in both the Consumer and Business segments. EBITDA grew by 4.7%, driven by higher service revenues, while free cash flow declined due to increased interest and tax payments, expected to recover in the second half of the year. KPN expanded its fiber footprint by adding 100,000 homes, covering 64% of Dutch households, and maintained a stable business net promoter score despite economic uncertainties. The company aims for a 3% CAGR in service revenues and adjusted EBITDA, and a 7% CAGR in free cash flow in the coming years, supported by its Connect, Activate & Grow strategy. KPN also upgraded its full-year 2025 outlook to over €2.6 billion in adjusted EBITDA after leases and €920 million in free cash flow, with stable CapEx at around €1.25 billion.

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.