VNET Group, Inc. Sponsored ADR (VNET) AI Stock Analysis

• Market Cap: $2.50B
• Dividend Yield: N/A
• Average Volume (3M): 5.99M
• Price to Earnings (P/E): 504.1
• Beta (1Y): 1.65
• Revenue Growth: 18.00%
• EPS Growth: N/A
• Country: US
• Employees: 2,581
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): >-0.01
• Shares Outstanding: 263,895,600
• 10 Day Avg. Volume: 4,105,022
• 30 Day Avg. Volume: 5,985,960
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.93
• Enterprise Value/Revenue: 0.53
• Enterprise Value/Gross Profit: 2.28
• Enterprise Value/Ebitda: 2.31
• 1Y Price Target: $16.06
• Price Target Upside: 63.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: $9.50 ▼(-3.36% Downside)

VNET's overall stock score is primarily influenced by its strong earnings call performance, which indicates robust revenue and EBITDA growth. However, financial performance is constrained by high leverage and cash flow issues, while the valuation appears stretched with a high P/E ratio. Technical indicators show mixed signals, with short-term weakness but a longer-term uptrend.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for VNET's services, enhancing its market position and supporting long-term financial health.

Strategic Initiatives

The Hyperscale 2.0 framework positions VNET as a leader in the IDC industry, aligning with AI-driven growth and ensuring future scalability.

Operational Efficiency

Improved EBITDA margins reflect enhanced operational efficiency, contributing to better profitability and financial resilience.

Negative Factors

High Leverage

High leverage increases financial risk and could limit VNET's ability to invest in growth opportunities, impacting long-term stability.

Profitability Challenges

Low profitability margins suggest challenges in converting revenue into profit, potentially affecting future cash flows and investment capacity.

Cash Flow Concerns

Insufficient cash generation to cover net income indicates potential liquidity issues, which could hinder operational and strategic flexibility.

VNET Group, Inc. Sponsored ADR Business Overview & Revenue Model

Company Description

VNET Group, Inc. Sponsored ADR (VNET) is a leading provider of internet data center services in China, focusing on cloud computing, big data, and network services. The company operates a comprehensive suite of products that include data center services, cloud services, and managed IT solutions, catering primarily to businesses looking to optimize their operations and enhance digital transformation. VNET plays a crucial role in supporting the growing demand for reliable internet infrastructure in the rapidly evolving tech landscape of China.

How the Company Makes Money

VNET generates revenue primarily through its data center services, which include colocation, managed hosting, and cloud computing solutions. The company charges customers based on the amount of rack space, power consumption, and additional services utilized. Key revenue streams include recurring fees from long-term contracts with enterprises and government clients, as well as one-time project fees for setup and installation. VNET also benefits from partnerships with major technology firms, which enhance its service offerings and expand its customer base. Additionally, the increasing demand for digital transformation and cloud-based services amid the growth of the internet economy in China significantly contributes to its earnings.

VNET Group, Inc. Sponsored ADR Financial Statement Overview

Summary

VNET demonstrates consistent revenue growth and improved operational efficiency, but faces challenges with profitability due to high expenses and leverage. The balance sheet is heavily leveraged, increasing financial risk, and cash flow issues highlight potential liquidity concerns.

Income Statement

VNET has shown consistent revenue growth over the years, with a TTM growth rate of 5.12%. The gross profit margin has improved slightly to 23.32% in the TTM, indicating better cost management. However, the net profit margin remains low at 0.63%, suggesting challenges in converting revenue into profit. The EBIT and EBITDA margins have improved, reflecting operational efficiency gains, but the overall profitability is still constrained by high expenses.

Balance Sheet

The company's debt-to-equity ratio has increased to 3.94 in the TTM, indicating a high level of leverage, which could pose financial risks. The return on equity is low at 0.91%, reflecting limited profitability relative to shareholder equity. The equity ratio is stable, but the high debt levels overshadow the balance sheet's strength.

Cash Flow

VNET's cash flow situation is concerning, with negative free cash flow growth and a free cash flow to net income ratio of -1.30, indicating that the company is not generating sufficient cash to cover its net income. The operating cash flow to net income ratio is low, suggesting potential liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.05B	8.26B	7.41B	7.07B	6.19B	4.83B
Gross Profit	2.11B	1.83B	1.29B	1.36B	1.44B	1.08B
EBITDA	2.08B	2.22B	-366.56M	1.24B	2.27B	-1.21B
Net Income	56.99M	183.20M	-2.64B	-763.92M	500.10M	-2.69B
Balance Sheet
Total Assets	39.71B	32.36B	30.39B	26.95B	23.10B	19.37B
Cash, Cash Equivalents and Short-Term Investments	4.16B	1.55B	2.60B	7.66M	100.02M	3.00B
Total Debt	24.34B	18.09B	17.17B	14.76B	11.12B	8.25B
Total Liabilities	32.09B	25.44B	23.87B	19.97B	15.49B	12.48B
Stockholders Equity	6.17B	6.37B	6.01B	6.61B	7.24B	6.56B
Cash Flow
Free Cash Flow	-2.55B	-3.12B	-997.15M	-450.61M	-1.35B	-1.79B
Operating Cash Flow	1.97B	2.01B	2.06B	2.60B	1.39B	714.24M
Investing Cash Flow	-6.65B	-4.39B	-3.91B	-3.56B	-3.77B	-3.89B
Financing Cash Flow	1.90B	-627.65M	3.94B	2.30B	967.58M	4.16B

VNET Group, Inc. Sponsored ADR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNET, the sentiment is Positive. The current price of 9.83 is above the 20-day moving average (MA) of 9.61, above the 50-day MA of 9.51, and above the 200-day MA of 8.25, indicating a bullish trend. The MACD of 0.13 indicates Positive momentum. The RSI at 50.66 is Neutral, neither overbought nor oversold. The STOCH value of 25.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VNET.

VNET Group, Inc. Sponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBM	77 Outperform	$281.22B	35.99	30.25%	2.38%	4.51%	21.89%
INFY	74 Outperform	$68.79B	20.65	29.15%	3.16%	4.62%	1.06%
DXC	62 Neutral	$2.36B	6.82	12.33%	―	-4.13%	2143.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GDS	61 Neutral	$7.04B	2,356.55	1.40%	―	7.29%	―
VNET	57 Neutral	$2.50B	504.10	1.02%	―	18.00%	―
BBAI	44 Neutral	$2.50B	―	-222.48%	―	3.46%	-74.21%

VNET Group, Inc. Sponsored ADR Corporate Events

VNET Group Reports Strong Q2 2025 Financial Results and Unveils Hyperscale 2.0 Framework

On August 21, 2025, VNET Group, Inc. reported its unaudited financial results for the second quarter ending June 30, 2025, showcasing a robust performance. The company experienced a 22.1% increase in total net revenues year over year, reaching RMB2.43 billion, driven by a significant 112.5% growth in wholesale revenue. VNET’s strategic execution led to a rapid expansion in its wholesale IDC business, with a notable increase in wholesale capacity and utilization. The unveiling of the Hyperscale 2.0 framework in late June marks a strategic move towards enhancing VNET’s leadership in AIDC development, aiming to grow its data center capacity to 10GW by 2036. This strategic initiative positions VNET to capitalize on AI-driven opportunities, promising sustainable long-term value for stakeholders.