VNET Group Reports Q2 Revenue Surge, Expects 11-13% FY2025 Growth

VNET Group, Inc. reported a net loss of RMB 11.9 million for the second quarter, a decline from a net income of RMB 63.7 million the previous year, primarily due to increased interest and income tax expenses. Despite the loss, the company's total net revenues grew by approximately 22% to RMB 2.43 billion, driven mainly by growth in its wholesale IDC business, and adjusted EBITDA increased by 27.7% to RMB 732.5 million. The company exceeded market expectations with revenues of $339.8 million and projects revenue growth of 11% to 13% by 2025. Analysts maintain an optimistic outlook, giving VNET an average 'Outperform' rating with a one-year price target averaging $13.59, indicating significant upside potential. However, some caution is advised as GuruFocus estimates a potential downside, valuing the stock at $2.99 within a year, suggesting a possible 62.53% decline from its current price. Overall, VNET's financial performance shows strong revenue and EBITDA growth despite reporting a GAAP loss, with mixed investor sentiment regarding its future valuation.