Key Takeaways:
VEON Ltd. (NASDAQ: VEON) reported first-quarter revenue of $1.201 billion, a 17% year-over-year increase that prompted the digital operator to raise its full-year sales guidance.
"VEON has kicked off 2026 with strong momentum, delivering double-digit growth in both revenue and EBITDA," VEON Group CEO Kaan Terzioglu said. "Digital revenues surged 57.7%, and now account for over a quarter of Group revenue, while core telecom remains resilient."
The company's top-line result surpassed the consensus analyst estimate of $1.16 billion. Earnings before interest, taxes, depreciation, and amortization rose 17.7% to $517 million. Following the strong quarter, VEON raised its 2026 revenue growth outlook to 11-14% from a prior range of 9-12%.
The performance was driven by a sharp increase in VEON's digital and financial services offerings. Digital revenues climbed 57.7% to $303 million, comprising 25.2% of total revenue for the quarter. Financial services revenue grew 41% to $135 million. The company also generated $246 million in equity free cash flow, a 73.4% increase from the prior year.
Ahead of the report, analysts were broadly positive on VEON. Based on three brokerage firms, the stock holds a consensus "Outperform" rating, according to GuruFocus data. Four analysts offer a one-year average price target of $77.41, implying 54.7% upside from its recent price of $50.03.
From a valuation perspective, the stock appears undervalued compared to its industry. Zacks Investment Research notes VEON trades at a P/E ratio of 6.62, well below the industry average of 17.99. Its price-to-sales ratio of 0.81 also sits favorably against the industry average of 1.26.
The strong quarterly results and positive outlook reinforce VEON's transition to a digital-focused operator. The company is expanding its strategic initiatives, including the planned acquisition of TPL Insurance in Pakistan and the expansion of its Starlink partnership in Bangladesh, Kazakhstan, and Ukraine.
The guidance raise signals management's confidence that its digital strategy will continue to yield strong growth. Investors will watch for the closing of the TPL Insurance acquisition, expected in mid-2026, as the next major catalyst.
This article is for informational purposes only and does not constitute investment advice.
