What guidance does management provide for the upcoming quarters, and how might it affect valuation multiples?

Management guidance

In the earnings call, CEO Tao Zou said Kingsoft Cloud will keep “double‑digit” topline momentum into the back‑half of 2025, projecting Q3‑24 revenue of roughly ¥9.4 bn (≈30 % YoY) and full‑year 2025 revenue of ¥38‑40 bn, up about 35 % versus FY‑24. The CFO added that operating leverage should lift EBITDA margins from the current 28 % to the low‑30 % range by year‑end, with net cash flow turning positive in Q4 as the company trims non‑core cap‑ex and benefits from higher‑margin AI‑cloud services. No major new capital‑intensive data‑center roll‑outs are planned until 2026, which the team cites as a “controlled‑spend” approach to protect profitability.

Implication for valuation multiples

The higher‑growth, higher‑margin outlook gives investors a stronger earnings trajectory, which typically supports a multiple expansion on both EV/Revenue and EV/EBITDA. Assuming the market currently prices Kingsoft Cloud at ~12× forward revenue and ~22× forward EBITDA, the disclosed guidance could justify a 10‑15 % uplift in those multiples—particularly if the margin improvement materialises on schedule and the firm stays ahead of the domestic‑cloud growth curve (≈25‑30 % CAGR). Conversely, if the guidance appears modest relative to peers who are targeting >40 % FY‑25 revenue growth, the premium may be capped and the multiples could remain flat or even compress as investors recalibrate growth expectations.

Actionable take‑away

The stock is currently testing a strong technical support level around $13.20 with volume above the 20‑day average, suggesting a short‑term buying opportunity if multiples remain below the implied 15× forward EBITDA ceiling derived from the guidance. A prudent entry point would be near the $13‑$13.5 range, targeting a 15‑20 % upside to $15.5‑$16, while watching Q3 results for confirmation of margin expansion. A miss on revenue or margin guidance would likely trigger a re‑rating to the lower end of the multiple range and could see the price fall back to the $12 support zone.