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VNET GROUP INC-ADR (VNET) Stock Fundamental Analysis

NASDAQ:VNET - Nasdaq - US90138A1034 - ADR - Currency: USD

7.42  +0.24 (+3.34%)

After market: 7.43 +0.01 (+0.13%)

Fundamental Rating

2

We assign a fundamental rating of 2 out of 10 to VNET. VNET was compared to 82 industry peers in the IT Services industry. Both the profitability and financial health of VNET have multiple concerns. While showing a medium growth rate, VNET is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

VNET had negative earnings in the past year.
VNET had a positive operating cash flow in the past year.
In the past 5 years VNET reported 4 times negative net income.
VNET had a positive operating cash flow in each of the past 5 years.
VNET Yearly Net Income VS EBIT VS OCF VS FCFVNET Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B -1B 2B -2B

1.2 Ratios

Looking at the Return On Assets, with a value of -7.51%, VNET is doing worse than 68.35% of the companies in the same industry.
VNET has a worse Return On Equity (-35.48%) than 67.09% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.33%, VNET is in line with its industry, outperforming 44.30% of the companies in the same industry.
Industry RankSector Rank
ROA -7.51%
ROE -35.48%
ROIC 0.33%
ROA(3y)-3.15%
ROA(5y)-4.94%
ROE(3y)-16.29%
ROE(5y)-18.76%
ROIC(3y)N/A
ROIC(5y)N/A
VNET Yearly ROA, ROE, ROICVNET Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -10 -20 -30 -40

1.3 Margins

VNET's Operating Margin of 1.16% is in line compared to the rest of the industry. VNET outperforms 46.84% of its industry peers.
Looking at the Gross Margin, with a value of 20.45%, VNET is doing worse than 78.48% of the companies in the same industry.
VNET's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 1.16%
PM (TTM) N/A
GM 20.45%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-7.85%
GM growth 5Y-8.9%
VNET Yearly Profit, Operating, Gross MarginsVNET Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 -40

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0

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VNET is destroying value.
The number of shares outstanding for VNET has been increased compared to 1 year ago.
The number of shares outstanding for VNET has been increased compared to 5 years ago.
The debt/assets ratio for VNET is higher compared to a year ago.
VNET Yearly Shares OutstandingVNET Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M
VNET Yearly Total Debt VS Total AssetsVNET Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

2.2 Solvency

Based on the Altman-Z score of 0.07, we must say that VNET is in the distress zone and has some risk of bankruptcy.
VNET has a worse Altman-Z score (0.07) than 83.54% of its industry peers.
VNET has a Debt/Equity ratio of 1.67. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.67, VNET is not doing good in the industry: 74.68% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 1.67
Debt/FCF N/A
Altman-Z 0.07
ROIC/WACC0.04
WACC8.2%
VNET Yearly LT Debt VS Equity VS FCFVNET Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B

2.3 Liquidity

VNET has a Current Ratio of 0.83. This is a bad value and indicates that VNET is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.83, VNET is not doing good in the industry: 84.81% of the companies in the same industry are doing better.
A Quick Ratio of 0.83 indicates that VNET may have some problems paying its short term obligations.
VNET has a worse Quick ratio (0.83) than 84.81% of its industry peers.
Industry RankSector Rank
Current Ratio 0.83
Quick Ratio 0.83
VNET Yearly Current Assets VS Current LiabilitesVNET Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

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5

3. Growth

3.1 Past

The earnings per share for VNET have decreased strongly by -780.43% in the last year.
Looking at the last year, VNET shows a small growth in Revenue. The Revenue has grown by 6.98% in the last year.
The Revenue has been growing by 16.86% on average over the past years. This is quite good.
EPS 1Y (TTM)-780.43%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%157.14%
Revenue 1Y (TTM)6.98%
Revenue growth 3Y15.36%
Revenue growth 5Y16.86%
Sales Q2Q%12.39%

3.2 Future

Based on estimates for the next years, VNET will show a very strong growth in Earnings Per Share. The EPS will grow by 25.82% on average per year.
VNET is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.05% yearly.
EPS Next Y104.8%
EPS Next 2Y41.7%
EPS Next 3Y25.82%
EPS Next 5YN/A
Revenue Next Year7.19%
Revenue Next 2Y9.32%
Revenue Next 3Y10.76%
Revenue Next 5Y10.05%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
VNET Yearly Revenue VS EstimatesVNET Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2B 4B 6B 8B 10B
VNET Yearly EPS VS EstimatesVNET Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 0 -5 -10 -15

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1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for VNET. In the last year negative earnings were reported.
Based on the Price/Forward Earnings ratio of 397.85, the valuation of VNET can be described as expensive.
64.56% of the companies in the same industry are cheaper than VNET, based on the Price/Forward Earnings ratio.
VNET is valuated expensively when we compare the Price/Forward Earnings ratio to 91.29, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE N/A
Fwd PE 397.85
VNET Price Earnings VS Forward Price EarningsVNET Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 100 200 300

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VNET is valued a bit cheaper than the industry average as 72.15% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 13.74
VNET Per share dataVNET EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 -2 4

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VNET does not grow enough to justify the current Price/Earnings ratio.
VNET's earnings are expected to grow with 25.82% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y41.7%
EPS Next 3Y25.82%

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0

5. Dividend

5.1 Amount

VNET does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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VNET GROUP INC-ADR

NASDAQ:VNET (1/29/2025, 8:00:02 PM)

After market: 7.43 +0.01 (+0.13%)

7.42

+0.24 (+3.34%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-20 2024-11-20/amc
Earnings (Next)N/A N/A
Inst Owners29.5%
Inst Owner Change0.75%
Ins Owners2.17%
Ins Owner ChangeN/A
Market Cap1.98B
Analysts85
Price Target5.91 (-20.35%)
Short Float %22.26%
Short Ratio3.24
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)498.51%
Min EPS beat(2)156.02%
Max EPS beat(2)840.99%
EPS beat(4)2
Avg EPS beat(4)-128.51%
Min EPS beat(4)-1106.87%
Max EPS beat(4)840.99%
EPS beat(8)5
Avg EPS beat(8)-64.28%
EPS beat(12)7
Avg EPS beat(12)184.44%
EPS beat(16)10
Avg EPS beat(16)231.54%
Revenue beat(2)2
Avg Revenue beat(2)2.13%
Min Revenue beat(2)1.05%
Max Revenue beat(2)3.2%
Revenue beat(4)2
Avg Revenue beat(4)-1.45%
Min Revenue beat(4)-7.75%
Max Revenue beat(4)3.2%
Revenue beat(8)2
Avg Revenue beat(8)-2.42%
Revenue beat(12)2
Avg Revenue beat(12)-2.83%
Revenue beat(16)3
Avg Revenue beat(16)-2.12%
PT rev (1m)0.43%
PT rev (3m)24.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-275%
EPS NY rev (1m)0%
EPS NY rev (3m)256.58%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.77%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.26%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE 397.85
P/S 1.81
P/FCF N/A
P/OCF 6.63
P/B 2.27
P/tB 2.88
EV/EBITDA 13.74
EPS(TTM)-2.24
EYN/A
EPS(NY)0.02
Fwd EY0.25%
FCF(TTM)-1.24
FCFYN/A
OCF(TTM)1.12
OCFY15.07%
SpS4.09
BVpS3.28
TBVpS2.58
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -7.51%
ROE -35.48%
ROCE 0.43%
ROIC 0.33%
ROICexc 0.35%
ROICexgc 0.38%
OM 1.16%
PM (TTM) N/A
GM 20.45%
FCFM N/A
ROA(3y)-3.15%
ROA(5y)-4.94%
ROE(3y)-16.29%
ROE(5y)-18.76%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-7.85%
GM growth 5Y-8.9%
F-Score5
Asset Turnover0.26
Health
Industry RankSector Rank
Debt/Equity 1.67
Debt/FCF N/A
Debt/EBITDA 6.12
Cap/Depr 277.83%
Cap/Sales 57.62%
Interest Coverage 250
Cash Conversion 124.91%
Profit Quality N/A
Current Ratio 0.83
Quick Ratio 0.83
Altman-Z 0.07
F-Score5
WACC8.2%
ROIC/WACC0.04
Cap/Depr(3y)195.52%
Cap/Depr(5y)201.6%
Cap/Sales(3y)43.61%
Cap/Sales(5y)43.39%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-780.43%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%157.14%
EPS Next Y104.8%
EPS Next 2Y41.7%
EPS Next 3Y25.82%
EPS Next 5YN/A
Revenue 1Y (TTM)6.98%
Revenue growth 3Y15.36%
Revenue growth 5Y16.86%
Sales Q2Q%12.39%
Revenue Next Year7.19%
Revenue Next 2Y9.32%
Revenue Next 3Y10.76%
Revenue Next 5Y10.05%
EBIT growth 1Y-58.92%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year903.29%
EBIT Next 3Y141.68%
EBIT Next 5Y87.44%
FCF growth 1Y-402.14%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-19.76%
OCF growth 3Y42.43%
OCF growth 5Y23.96%