VEON's Meteoric Rise: Is the Telecom Stock Still a Bargain After Tripling in Three Years?
LONDON/NEW YORK – VEON Ltd. (NASDAQ: VEON), the Amsterdam-based telecom operator with a sprawling footprint across emerging markets from Ukraine to Pakistan, has delivered a staggering return for its shareholders. With its stock price having multiplied by roughly 3.4 times over the past three years, closing recently at $54.64, the company now faces a pivotal question from the market: after such a powerful run, is there any value left to unlock?
The performance metrics are eye-catching. Beyond the three-year explosion, VEON has posted a 26.5% gain over the last year, solidly outpacing many peers in the volatile wireless telecom sector. This rally has been fueled by a strategic pivot, including asset sales to reduce debt and a sharpened focus on high-growth digital services in its core markets.
"The narrative around VEON has fundamentally shifted from a distressed seller to a streamlined growth story," noted market analyst David Chen of Horizon Capital. "Management's execution on deleveraging and their 4G/5G rollout in key markets like Bangladesh and Uzbekistan is finally being recognized by the market."
Yet, beneath the surface of share price momentum, traditional valuation tools paint a picture of deep potential value. A Discounted Cash Flow (DCF) analysis, which projects future cash flows and discounts them to a present value, suggests an intrinsic value of approximately $512 per share for VEON. This implies the current market price represents a discount of nearly 90%.
Similarly, the stock trades at a Price-to-Earnings (P/E) ratio of just 5.85x. This sits far below the wireless telecom industry average of 18.52x and a broader calculated "Fair Ratio" of 13.79x for VEON, which accounts for its specific growth profile and risk factors.
"On a pure numbers basis, VEON screams 'value'," said portfolio manager Anya Petrova during a recent investor call. "The disconnect between the P/E and the sector, coupled with the DCF model's output, is too large to ignore. This isn't just cheap; it's statistically anomalous for a company with positive cash flow and a clear turnaround trajectory."
However, the bullish valuation thesis is not without its skeptics. The company's significant exposure to geopolitical risks in regions like Ukraine and Kazakhstan remains a persistent overhang, potentially justifying a permanent discount in the eyes of some investors.
Market Voices: A Split Verdict
"I've held VEON through the worst of it, and this re-rating is long overdue. The DCF model confirms what the fundamentals have been showing: this is a cash-generating machine trading at a liquidation multiple. The geopolitical risk is priced in ten times over." – Marcus Thorne, long-term retail investor.
"Are you kidding me? A 90% discount? These DCF models are fantasy football for finance bros. You can't model away the real and present danger of operating in Russia's backyard. The recent price run-up is speculative froth, not a fundamental revaluation. This is a value trap par excellence." – Dr. Lena Kowalski, Professor of Emerging Markets Finance, speaking bluntly on her widely-followed financial podcast.
"The truth is in the middle. The valuation metrics are compelling and suggest upside, but investors must weigh that against the unique operational risks. It's a high-conviction, high-risk play. For those with the stomach for it, the potential reward seems to justify the risk, but it's not for the faint-hearted." – Rajiv Mehta, independent financial advisor.
As the debate continues, tools like Simply Wall St's "Narratives" allow investors to stress-test these assumptions, linking VEON's business story—be it cautious or optimistic—directly to financial forecasts and fair value estimates.
Disclaimer: This analysis is based on historical data and analyst projections using an unbiased methodology. It is not financial advice and does not constitute a recommendation to buy or sell any security. Investors should consider their own objectives and financial situation.