Veon's $100M Buyback Program and Its Implications for Value Creation

In the ever-evolving telecom sector, companies must balance growth, debt management, and shareholder returns to stay competitive. Veon (VEON) has taken a bold step with its $100 million buyback program, announced on November 10, 2025, and set to commence on November 17, 2025. This move, which allows the repurchase of both American Depositary Shares (ADSs) and/or bonds, underscores the company's commitment to strategic capital allocation and signals confidence in its undervalued equity. Let's dissect what this means for investors and whether Veon's approach could unlock hidden value.

A Dual-Pronged Approach to Capital Allocation

Veon's buyback program is not a one-size-fits-all strategy. By authorizing repurchases of both equity and debt, the company is positioning itself to act opportunistically based on market conditions. As CEO Kaan Terzioglu stated, the program reflects "disciplined capital allocation" and a belief that Veon's equity is undervalued relative to its fundamentals, including its robust cash-generation profile and digital transformation trajectory.

The flexibility to repurchase bonds is equally compelling. By reducing future interest obligations and proactively managing debt maturities, Veon can lower its cost of capital and free up resources for reinvestment. This dual focus on equity and debt buybacks demonstrates a nuanced understanding of capital structure optimization-a hallmark of companies with strong governance.

The Numbers Behind the Narrative

Veon's Q3 2025 earnings report provides a solid foundation for its valuation argument. The company reported a 7.5% year-over-year revenue increase and a 19.7% surge in EBITDA, despite GAAP earnings missing expectations due to a $259 million non-cash charge according to Seeking Alpha. However, the CEO emphasized that these results masked the company's underlying strength: EBITDA growth alone added $70 million to shareholder equity during the quarter.

Direct digital revenue, a key growth driver, soared 63% YoY to nearly $200 million, highlighting Veon's successful pivot toward high-margin digital services. Meanwhile, multiplay customers-those using bundled services like broadband and mobile-grew by 23% YoY and now account for 55.4% of total revenue, generating 3.8x the average revenue per user of voice-only subscribers. These metrics suggest a business with durable competitive advantages and scalable margins.

Is Veon Undervalued? The Data Speaks

Veon's valuation appears compelling when compared to industry peers. As of November 17, 2025, its trailing P/E ratio stands at 4.39, significantly below the industry median of 16.34. This low multiple is further supported by analyst estimates suggesting a potential 32% undervaluation, with a fair value of $69.64 versus a closing price of $47.33 according to Simply Wall St.

The company's asset-light restructuring efforts-such as tower sales and 4G-focused infrastructure investments-have also improved operational efficiency and return on invested capital (ROIC). Despite these positives, Veon's stock has declined nearly 19% over the past three months, raising questions about market pricing.

Strategic Buybacks in a Low-Interest Environment

Veon's decision to initiate a buyback program in a low-interest environment is particularly savvy. With EBITDA margins at 47.0% and capex intensity projected at 17% to 19% for 2025 (excluding Ukraine), the company has ample liquidity to fund share repurchases without compromising growth according to Seeking Alpha. By using a 10b5-1 plan, Veon ensures compliance with Rule 10b-18, minimizing regulatory risks and signaling transparency to investors according to Seeking Alpha.

Moreover, the buyback program aligns with Veon's updated full-year outlook, which now anticipates 16% to 18% local currency EBITDA growth and 7% to 8% USD revenue growth. These revised targets, combined with the buyback's potential to boost earnings per share (EPS), could catalyze a re-rating of the stock.

Risks and Considerations

While the buyback program is a positive catalyst, investors should remain cautious. Veon's exposure to geopolitical risks in Ukraine and its reliance on debt financing for past expansions could pose challenges. Additionally, the absence of a clear path to a higher P/E ratio-despite strong fundamentals-suggests that market sentiment remains cautious.

Conclusion: A Buy for the Disciplined Investor

Veon's $100 million buyback program is a testament to its strategic capital allocation discipline and confidence in its undervalued equity. With a P/E ratio near its 2-year low, robust EBITDA growth, and a clear focus on digital transformation, the company is well-positioned to create shareholder value. For investors willing to look beyond short-term volatility, Veon offers an attractive opportunity to capitalize on a telecom giant navigating a complex but promising landscape.