As of October 23, 2025, Xunlei Ltd has a Discounted Cash Flow (DCF) derived fair value of $2.74 per share. With the current market price at $8.53, this represents a potential upside of -67.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.63 |
| DCF Fair Value (10-year) | $2.74 |
| Potential Upside (5-year) | -92.6% |
| Potential Upside (10-year) | -67.9% |
| Discount Rate (WACC) | 5.3% - 7.5% |
Revenue is projected to grow from $323 million in 12-2024 to $557 million by 12-2034, representing a compound annual growth rate of approximately 5.6%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 323 | - |
| 12-2025 | 352 | 9% |
| 12-2026 | 383 | 9% |
| 12-2027 | 398 | 4% |
| 12-2028 | 418 | 5% |
| 12-2029 | 437 | 5% |
| 12-2030 | 466 | 7% |
| 12-2031 | 484 | 4% |
| 12-2032 | 523 | 8% |
| 12-2033 | 547 | 5% |
| 12-2034 | 557 | 2% |
Net profit margin is expected to improve from 0% in 12-2024 to 3% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 1 | 0% |
| 12-2025 | 1 | 0% |
| 12-2026 | 4 | 1% |
| 12-2027 | 7 | 2% |
| 12-2028 | 11 | 3% |
| 12-2029 | 14 | 3% |
| 12-2030 | 15 | 3% |
| 12-2031 | 16 | 3% |
| 12-2032 | 17 | 3% |
| 12-2033 | 18 | 3% |
| 12-2034 | 18 | 3% |
with a 5-year average of $11 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 12 |
| 12-2026 | 14 |
| 12-2027 | 16 |
| 12-2028 | 20 |
| 12-2029 | 23 |
| 12-2030 | 24 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 11 |
| Days Inventory | 3 |
| Days Payables | 48 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 6M/2025 | 7 | 0 | 10 | 6 | (9) |
| 2026 | 19 | 1 | 22 | (8) | 4 |
| 2027 | 24 | 1 | 23 | 0 | (0) |
| 2028 | 32 | 2 | 24 | 2 | 4 |
| 2029 | 40 | 3 | 25 | (2) | 14 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.63 | -92.6% |
| 10-Year DCF (Growth) | 2.74 | -67.9% |
| 5-Year DCF (EBITDA) | 3.04 | -64.4% |
| 10-Year DCF (EBITDA) | 4.11 | -51.8% |
Is Xunlei Ltd (XNET) a buy or a sell? Xunlei Ltd is definitely a sell. Based on our DCF analysis, Xunlei Ltd (XNET) appears to be overvalued with upside potential of -67.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $8.53.