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IQSTEL Seeks New Growth with Edison Coverage Initiation

In a powerful move signaling growth for iQSTEL Inc. (NASDAQ: IQST), a worldwide player in telecommunications and technology, Edison Investment Research has started coverage of the company with a favorable valuation of $6 per share. This valuation is a strategic highlight amidst expectations of increasing profitability and positive cash flow. The financial landscape appears promising as IQSTEL aligns its offerings with evolving market demands.

Financial Turnaround Ahead

Edison's report, titled "Innovating on a global platform," indicates that iQSTEL is approaching a crucial financial milestone. The company expects to enhance its telecommunications platform significantly with the impending addition of Ultranet, alongside the expansion of higher-margin digital services. Currently, IQSTEL is experiencing growth but is at a slightly near-break-even adjusted EBITDA level. However, projections show a transition into positive free cash flow by 2027 and 2028.

The forecasts are optimistic: 2027 is projected to bring in revenues of $653 million and adjusted EBITDA of $12.5 million, while 2028 could see an increase to $721 million in revenue and $15.9 million in adjusted EBITDA. These figures indicate a healthy growth trajectory supported by strategic investments and operational efficiencies. Notably, the adjusted EBITDA margins are predicted to expand from 0.1% in 2026 to 2.2% in 2028, strong evidence of the effectiveness of IQSTEL's strategic initiatives.


Source: Edison Investment Research

The Ultranet Advantage

Furthermore, Edison highlights the profit potential stemming from IQSTEL's ongoing collaboration with Ultranet, which is anticipated to greatly improve adjusted EBITDA. The completion of the Ultranet acquisition remains contingent on customary closing conditions, but its success could significantly enrich IQSTEL's operational landscape and revenue-generating capacity. The company has set a fiscal 2026 revenue target of $430 million, which remains firm and focuses purely on organic growth excluding Ultranet.

Digital Services as a Key Growth Driver

A key aspect of the report is the identification of IQSTEL's relationships with over 600 telecom service providers, creating access to around 2.3 billion end users globally. This widespread reach underscores the potential of this infrastructure to introduce and promote advanced services through established partnerships. Edison's report points out IQSTEL's venture with IDILIO TV as a promising avenue to distribute Spanish-language mobile entertainment, alongside the implications of other digital services such as artificial intelligence, cybersecurity, and fintech, all of which promise higher margins.

Despite digital services remaining a smaller segment of the overall revenue in the forecast period, their profit-generating capability is likely to support IQSTEL's broader financial goals.

Strengthening Financial Foundations

According to IQSTEL’s CEO, Leandro Iglesias, the major priority lies in converting the company’s extensive global reach and scale into sustainable earnings and cash generation. Edison's findings reflect a solid pathway to reduce dependence on equity financing, a pivotal aspect that could attract further investor interest and facilitate a revaluation of the company's overall market standing.

While the assumptions made by Edison regarding their forecasts pose intrinsic risks related to execution, funding, regulation, and partnerships, they denote a significant opportunity for IQSTEL. The successful integration and realization of projected income will be critical for the company moving forward.

The comprehensive Edison report can be accessed through IQSTEL's investor relations website at www.ir.iqstel.com. The information and projections delineated within provide insight into IQSTEL’s strategic direction, along with potential risks and rewards.

In conclusion, as IQSTEL nears a pivotal financial transition, the initiatives and growth strategies, including the integration of Ultranet, could catalyze robust profitability and secure its place as a formidable player in the telecommunications and technology sector.