IQSTEL's Strategic Transformation and EBITDA Expansion: A High-Conviction Play on AI-Driven Growth

In the ever-evolving landscape of global connectivity, IQSTEL Inc. (NASDAQ: IQST) stands out as a company undergoing a transformative leap. With a clear $1 billion revenue trajectory by 2027, aggressive EBITDA expansion, and a strategic pivot toward AI-driven innovation, IQSTEL is positioning itself as a multi-bagger opportunity for investors willing to act before the valuation gap closes.

Organic Growth and EBITDA Momentum

IQSTEL's Q2 2025 results underscore its operational resilience. Despite a challenging macroeconomic environment, the company achieved 17% year-over-year revenue growth in H1 2025, driven entirely by organic expansion. The telecom division, its core business, delivered a 29.94% quarter-over-quarter surge in net income to $321,321, while EBITDA for the first half of 2025 reached $1.1 million. This profitability is further bolstered by a 7.45% improvement in gross margin, reflecting disciplined cost management and operational efficiency.

The company's recent acquisition of GlobeTopper—a fintech leader in B2B digital prepaid solutions—adds a critical layer to its EBITDA growth. This 51% stake is projected to contribute $0.26 million in EBITDA for H2 2025, scaling to over $1 million in adjusted EBITDA by FY-2026 through cross-selling synergies. With 11 strategic acquisitions since 2018, IQSTEL has mastered the art of leveraging M&A to diversify revenue streams and amplify margins.

Debt Reduction and Balance Sheet Strength

A key catalyst for IQSTEL's undervaluation lies in its aggressive debt reduction strategy. In Q3 2025, the company announced a $3.5 million debt reduction, significantly improving its balance sheet. This move, coupled with a Net Shareholder's Equity increase from $11.9 million to $14.29 million in H1 2025, has strengthened its financial flexibility. The debt-to-equity ratio, currently at 78.40%, is expected to decline further, enhancing investor confidence in its capital structure.

AI-Driven Innovation and Strategic Partnerships

IQSTEL's transformation from a telecom services provider to a Global Connectivity & AI Technology Corporation is accelerating. The company's AI R&D initiatives, including platforms like airweb.ai and iq2call.ai, are set to revolutionize telecom, fintech, and cybersecurity services. A partnership with Cycurion to develop next-generation AI-based cybersecurity solutions further cements its position in high-growth sectors. These innovations are not just incremental—they represent a fundamental shift toward high-margin, scalable technologies.

Valuation Discrepancy and Long-Term Potential

Despite IQSTEL's robust fundamentals, its stock remains undervalued. The company trades at an EV/EBITDA of 436.57x, far above the Telecommunications Services industry median of 8.2x. However, this metric is misleading due to its current EBITDA of just $0.08 million (TTM). As EBITDA scales with AI integration and M&A synergies, the multiple will normalize. The intrinsic value of $3.10 per share, compared to its current price of $7.97, suggests a 157% premium, but this gap is expected to close as the company hits its $400 million revenue target in 2025 and accelerates toward $1 billion by 2027.

Investment Thesis: A Multi-Bagger Opportunity

IQSTEL's strategic transformation, combined with its debt reduction, AI-driven innovation, and clear revenue trajectory, creates a compelling case for long-term investors. The company's ability to generate $340 million in FY-2025 revenue—five months ahead of its original target—demonstrates executional excellence. With a $35.83 million enterprise value and a price-to-sales ratio of 0.06, the stock is trading at a discount to its revenue-generating potential.

Key Risks: Short-term earnings volatility and high EV/EBITDA may deter conservative investors. However, the company's focus on margin expansion, AI scalability, and strategic M&A mitigates these risks.

Conclusion: Act Before the Valuation Gap Closes

IQSTEL is at a pivotal inflection point. Its strategic shift to AI, coupled with a disciplined approach to debt and profitability, positions it to outperform in the global connectivity sector. For investors seeking a high-conviction play on a company with a $1 billion revenue trajectory, IQSTEL offers a rare combination of undervaluation, growth potential, and transformative innovation. The time to act is now—before the market fully recognizes its potential.