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Royal KPN
(OTC:KKPNY)
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Rating:59Neutral
Price Target:
$5.00
▲(6.16% Upside)
Action:Reiterated
Date:07/22/26
The score is driven primarily by stable profitability and cash generation, tempered by heightened balance-sheet risk from increased leverage and limited top-line momentum. The latest earnings call was moderately constructive with maintained EBITDA/FCF guidance and expected H2 revenue acceleration, but regulatory and B2B headwinds remain. Technically, the stock shows soft momentum (negative MACD and below key moving averages), while valuation is supported by the dividend but not compellingly cheap given the P/E.
Positive Factors
Resilient cash generation
Stable operating cash flow and improving free cash flow support network investment, debt servicing and shareholder distributions. This recurring cash-generation capacity provides resilience for a mature telecom business despite modest revenue growth.
Negative Factors
Elevated leverage and reduced flexibility
The sharp rise in leverage increases financial risk and reduces flexibility for fiber investment, acquisitions or shareholder returns. Although current interest coverage is strong, a smaller equity base leaves the company more exposed to operating or regulatory setbacks.
Read all positive and negative factors
Positive Factors
Negative Factors
Resilient cash generation
Stable operating cash flow and improving free cash flow support network investment, debt servicing and shareholder distributions. This recurring cash-generation capacity provides resilience for a mature telecom business despite modest revenue growth.
Read all positive factors
Royal KPN (KKPNY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.22B
Dividend Yield4.59%
Average Volume (3M)889.06K
Price to Earnings (P/E)17.8
Beta (1Y)-0.05
Revenue Growth9.08%
EPS Growth16.59%
CountryUS
Employees9,136
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.16
Shares Outstanding3,827,465,300
10 Day Avg. Volume1,200,978
30 Day Avg. Volume889,060
Financial Highlights & Ratios
PEG Ratio-4.22
Price to Book (P/B)6.63
Price to Sales (P/S)3.01
P/FCF Ratio13.49
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.27
Revenue Forecast (FY)$6.74B
Royal KPN Business Overview & Revenue Model
Company Description
Koninklijke KPN N.V. is a Dutch telecommunications and information technology company, delivering its services throughout the Netherlands. Its operations are structured into four main divisions: Consumer, Business, Wholesale, and Network, Operatio...
How the Company Makes Money
KPN makes money primarily by selling subscription-based telecommunications services and related connectivity solutions to consumer and business customers in the Netherlands. Key revenue streams typically include: (1) Mobile services: recurring mon...
Royal KPN Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a majority of operational and financial positives — underlying EBITDA growth ahead of midterm targets, margin expansion, a rebound in free cash flow, strong SME performance, improving consumer and mobile trends, fiber leadership, completed EUR 250m buyback, and maintained full-year EBITDA and free cash flow guidance. However, material challenges remain: weakness in Tailored Solutions and LCE that moderated service revenue outlook, a regulatory block on a key fiber transaction (ACM decision) limiting consolidation optionality, and near-term Q3 headwinds from lapping one-offs and CLA payments. On balance, the positive operational momentum, robust cash generation, and maintained guidance outweigh the near-term revenue and regulatory setbacks.Positive Updates
Group underlying EBITDA growth and margin expansion
Adjusted EBITDA after leases increased 3.4% year-on-year on a comparable basis (excluding one-offs) in Q2; reported EBITDA margin improved by ~8-40 basis points to 45.6% of adjusted revenues (various references in the call). Cost discipline and efficiency (indirect OpEx down ~EUR 50m year-on-year; workforce reduced by >330 FTEs) supported the improvement.
Negative Updates
B2B (Tailored Solutions and LCE) weakness dragging service revenue
Business service revenues declined 1.1% year-on-year in Q2. Tailored Solutions showed a notable decline (described as 'slightly more negative' than planned) and low-margin cleanup is ongoing. LCE face pressure: legacy services, low-margin cloud/workspace declines and competitive pricing in corporate connectivity and IoT; management expects LCE weakness to persist through the remainder of 2026 with recovery in 2027.
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Q2-2026 Updates
Positive
Negative
Group underlying EBITDA growth and margin expansion
Adjusted EBITDA after leases increased 3.4% year-on-year on a comparable basis (excluding one-offs) in Q2; reported EBITDA margin improved by ~8-40 basis points to 45.6% of adjusted revenues (various references in the call). Cost discipline and efficiency (indirect OpEx down ~EUR 50m year-on-year; workforce reduced by >330 FTEs) supported the improvement.
Read all positive updates
Company Guidance
KPN said it expects group service revenue to accelerate to roughly 2.0%–2.5% in H2 2026 (implying ~1.5% for FY‑2026 after a 0.75% H1), reiterated full‑year EBITDA and free cash flow (FCF) guidance, and flagged a U‑shaped EBITDA phasing with a modest Q3 drag and a planned Q4 pickup (Q3 headline likely slightly down due to a €16m prior‑year IPR benefit drop‑out and a one‑off €4–5m CLA payment); Q2 comparable adjusted EBITDA rose 3.4% with reported EBITDA margin at 45.6%; H1 FCF was €329m (+7% y/y) with operational FCF +3.1% (or +6.7% like‑for‑like), a small Q3 FCF drag expected and FCF more weighted to Q4; balance sheet at end‑June: cash €365m, liquidity €1.4bn, leverage 2.5% (expected to end year at or slightly below 2.5x), interest coverage 9.1x, floating rate exposure 18%, and ROCE 14.4% (target 15% in 2027); CapEx remains around €1bn next year with fiber ambitions toward ~80–85% footprint, EUR€250m buyback completed, and midterm targets intact (service revenue & EBITDA ~3% CAGR, FCF ~7% on average, and cumulative shareholder distributions preserved).Royal KPN Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
43
Neutral
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.56B | 5.57B | 5.60B | 5.44B | 5.32B | 5.27B |
| Gross Profit | 1.28B | 1.72B | 4.09B | 2.92B | 2.84B | 2.79B |
| EBITDA | 2.57B | 2.58B | 2.60B | 2.56B | 2.19B | 3.31B |
| Net Income | 880.47M | 821.26M | 848.00M | 844.00M | 760.00M | 1.29B |
Balance Sheet | ||||||
| Total Assets | 12.60B | 13.06B | 12.55B | 12.25B | 11.96B | 12.74B |
| Cash, Cash Equivalents and Short-Term Investments | 419.00M | 586.75M | 802.00M | 828.00M | 527.00M | 1.11B |
| Total Debt | 7.17B | 8.55B | 7.10B | 6.79B | 6.29B | 7.62B |
| Total Liabilities | 9.27B | 10.49B | 9.01B | 8.69B | 8.31B | 9.51B |
| Stockholders Equity | 3.29B | 2.53B | 3.53B | 3.56B | 3.65B | 3.23B |
Cash Flow | ||||||
| Free Cash Flow | 1.35B | 1.24B | 950.00M | 993.00M | 982.00M | 908.00M |
| Operating Cash Flow | 2.38B | 2.22B | 2.26B | 2.24B | 2.19B | 2.13B |
| Investing Cash Flow | -1.35B | -1.34B | -1.44B | -1.43B | -1.08B | -1.21B |
| Financing Cash Flow | -1.08B | -1.13B | -769.00M | -606.00M | -1.50B | -717.00M |
Royal KPN Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $18.99B | 14.58 | 9.70% | 7.34% | 16.10% | 24.13% | |
76 Outperform | $175.97B | 8.45 | 19.48% | 4.34% | 2.63% | 72.35% | |
69 Neutral | $208.32B | 13.13 | 15.52% | 5.54% | 1.38% | -10.78% | |
63 Neutral | $39.32B | -75.82 | -0.79% | 3.10% | 16.69% | 87.12% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
59 Neutral | $18.22B | 17.84 | 36.66% | 4.59% | 9.08% | 16.59% | |
55 Neutral | $3.62B | -1.25 | -29.39% | ― | ― | ― |
* Communication Services Sector Average
KKPNY
Royal KPN
4.79
0.10
2.20%
T
AT&T
25.15
-2.74
-9.81%
LBTYA
Liberty Global A
10.51
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-8.93%
VIV
Telefonica Brasil
11.79
0.23
2.02%
VZ
Verizon
49.74
9.03
22.18%
VOD
Vodafone
17.13
5.92
52.77%
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.