Credit Suisse lowers Kingsoft Cloud's target price to $16, maintaining a "Buy" rating

AASTOCKS
2025.06.06 01:58

The research report from Jefferies indicates that Kingsoft Cloud (03896.HK)(KC.US) reported revenue and adjusted EBITDA in the first quarter of this year that fell short of expectations, primarily due to seasonal impacts on its enterprise cloud business and clients still being in the budgeting phase. The public cloud business focuses on large clients, and the entire business cycle and collection process take time. The firm maintains a "Buy" rating on the stock, lowering the target price for U.S. stocks from $18 to $16.

Looking ahead to the second quarter, the firm expects Kingsoft Cloud's overall revenue to increase by 17% quarter-on-quarter, with both public cloud and enterprise cloud revenues also rising by 17% quarter-on-quarter, and a gross margin of approximately 14%, with an adjusted EBITDA margin reaching 19%. For the full year, the firm anticipates the company's revenue will increase by 18% year-on-year, with public cloud revenue rising by 27% year-on-year, while enterprise cloud will see only a slight increase; the gross margin forecast is slightly up to 14.6%, with an adjusted EBITDA margin reaching 20%, compared to market expectations of 15%, and the firm's previous expectation of 16%

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