If you're weighing what to do with VEON stock right now, you're not alone. After all, it's been a rollercoaster over the past few years, with more ups than downs lately. This year alone, the stock has gained 21.6% year-to-date, and if you zoom out to the past three years, VEON has skyrocketed an eye-popping 570.2%. Even over the last year, the stock is up 68.1%. Of course, that kind of performance gets noticed, especially as markets respond to shifting risk perceptions and as investors adjust their outlook on emerging market telecoms. The past month saw a slight dip of 5.7%, perhaps giving pause to some, while the past week's 4.9% bump hints at fresh optimism following recent market developments.
Here is the thing that really stands out for value-focused investors: VEON currently notches a perfect valuation score of 6. That means six out of six major valuation checks suggest the stock is undervalued right now. It is rare to see a stock pass every test in a valuation screen, which naturally begs the question: is the market missing something, or is there an opportunity hiding here?
Let's break down how VEON looks from different valuation angles, and explore why the numbers stack up the way they do. Before we wrap up, I'll share a perspective that goes beyond the usual valuation playbook, which is something every serious investor should keep in mind.
VEON delivered 68.1% returns over the last year. See how this stacks up to the rest of the Wireless Telecom industry.
Approach 1: VEON Discounted Cash Flow (DCF) Analysis
The Discounted Cash Flow (DCF) model estimates what a company is really worth by projecting its future cash flows and then discounting those back to today's dollars. This approach helps investors determine whether the current share price reflects the company's long-term earnings power.
For VEON, the current Free Cash Flow stands at $396.6 Million. Analysts have provided forecasts for the next several years, with Free Cash Flow expected to reach $1.45 Billion by 2029. Projections beyond the five-year analyst window are extrapolated, but the path suggests solid growth ahead, with estimates continuing to climb throughout the decade.
Based on these projections and after discounting future cash flows to present value, VEON's intrinsic value is calculated at $436.87 per share. Compared to the current market price, this implies the stock is trading at an 88.1% discount to its fair value. In other words, the DCF analysis suggests VEON is significantly undervalued by the market right now.