What Has Sent VEON Ltd. (VEON) To A Spiraling Downfall

VEON Ltd. (VEON) trading activity significantly improved as the volume at ready counter increased to 3,321,781 shares versus 2,294,600 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 4,118,449 shares. The share price dropped -3.42% in recent trade and currently has a stock-market value of $4.62B. The shares finished at $2.54, after trading as low as $2.52 earlier in the session. It hit an intraday high Thursday at $2.64. The stock is now 15.45% above against its bear-market low of $2.2 on April 09, 2018. It has retreated -61.81% since it’s 52-week high of $4.11 reached in January. Now the market price is down -35.2% on the year and down -33.85% YTD.

VEON’s 50 day simple moving average (SMA 50) price is $2.82 and its 200-day simple moving average (SMA 200) price is $2.74. The company’s stock currently has a total float of 228.88M shares. Its weekly volatility is hovering around 4.7% and felt 3.71% volatility in price over a month. On the upside, the share price will test short term resistance at around $2.61. On a downside, the stock is likely to find some support, which begins at $2.49. The failure to get near-term support could push it to $2.45.

It had seen a new analyst call from Goldman, which initiated the stock at Neutral on October 12. Analysts at HSBC Securities, shed their negative views on August 20 by lifting it fromHold to Buy. The stock won favor of Goldman analysts who expressed their confidence in it using an upgrade from Neutral to Buy on July 06. JP Morgan analysts came out with bullish views on July 03 when the call was made. They think the stock is now Overweight compared to to their prior call for Neutral.

Moreover, it trades for 10.95 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.13x price/book and 0.5x price/sales. Compared to others, VEON Ltd. is in a different league with regards to profitability, having net margins of 5.4%. To put some perspective around this, the industry’s average net margin is 7.46%. VEON’s ROE is 12.4%, which is also considerably better than the industry’s ROE of 7.61%. It’s also very liquid in the near term, with a current ratio of 1. The stock has a debt/capital of 2.49.

Shares of VEON Ltd. (VEON) have dropped -9.3% since the company’s last earnings report. VEON last reported earnings on November 08, 2018 when it released Sep-18 results that exceeded expectations. The company raked in $0.49 per share, -99.93% change on the same period last year. That was better than consensus for $0.06. Revenue for the recent quarter stood at $2.32 billion, down -6% on last year and above the $2.19 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $2 billion to $2.24 billion, which should be compared with $0 generated last year. EPS is seen in a range of $0.03 to $0.04, against the 0 reported a year ago.