Kingsoft Cloud Reports Mixed 4Q Results

Kingsoft Cloud Holdings, a Chinese independent cloud service provider, posted a better-than-feared 4Q loss, driven by strong revenues from both public cloud services and enterprise cloud services. Meanwhile, total revenues for the quarter missed analysts’ expectations. Shares dipped almost 8% in the pre-market trading session.

Kingsoft Cloud’s (KC) 4Q adjusted loss came in at $0.00 (RMB0.03) per share, versus analysts’ expectations of a $0.09 loss per share. The company reported a loss of RMB0.32 per share in the same quarter last year.

Total revenues of $294.7 million (RMB1,922.7 million) missed the Street’s estimates of $297.23 million but advanced 63.8% from the year-ago period.

The company’s public cloud services revenue increased 44.1% year-over-year, while revenues from enterprise cloud services surged 143.1%. Additionally, the adjusted gross margin was 4.9%, up from 4.8% reported in the prior-year quarter. (See Kingsoft Cloud stock analysis on TipRanks)

Kingsoft Cloud CEO Mr. Yulin Wang said, “By deeply digging into and understanding customer needs during this profound era of digital transformation, we have laid a solid foundation to expand our customer base and drive steady growth this year.”

For the first quarter of 2021, the company projects total revenues to be in the range of RMB1.83 billion to RMB1.93 billion.

Recently, Jefferies analyst Thomas Chong initiated coverage of the stock with a Buy rating and a price target of $55 (9% upside potential).

Chong said, “The company is a leading cloud service provider whose premium customer and platform neutral strategy stands out.”

Further, the analyst views “technology and services to be key for Kingsoft Cloud, rather than pricing.”

Kingsoft Cloud shares have exploded 111.5% over the past year, while the stock still scores a Strong Buy consensus rating based on 3 unanimous Buys. That’s alongside an average analyst price target of $59.33, which implies 17.7% upside potential to current levels.

What’s more, Kingsoft Cloud scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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