VNET Group (NASDAQ:VNET) Posts Earnings Results, Misses Expectations By $0.04 EPS

VNET Group (NASDAQ:VNET) posted its earnings results on Tuesday. The information technology services provider reported ($0.06) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.02) by ($0.04), Zacks reports. VNET Group had a negative return on equity of 34.65% and a negative net margin of 22.29%.The company had revenue of $409.00 million for the quarter, compared to the consensus estimate of $401.77 million.

Here are the key takeaways from VNET Group’s conference call:

• Positive Sentiment: AI-driven demand remained strong, with VNET securing 347 MW of Q2 orders and 862 MW year to date; total orders and reservations exceeded 1.2 GW, providing visibility into future deliveries.
• Positive Sentiment: Wholesale capacity in service surpassed 1 GW, rising 49.4% year over year, while utilized capacity increased 45.5% to 744 MW. Mature wholesale utilization reached 92.5%, and management expects move-ins to improve modestly in the second half.
• Positive Sentiment: Q2 revenue rose 14.2% to RMB 2.78 billion and adjusted EBITDA increased 25.4% to RMB 918.3 million, while adjusted net income turned positive at RMB 7.4 million. Management reiterated full-year revenue guidance of RMB 11.5–11.8 billion and adjusted EBITDA guidance of RMB 3.55–3.75 billion.
• Neutral Sentiment: VNET added substantial resource reserves, including approximately 1.4 GW of new land-bank capacity and about 500 MW overseas, but said overseas development will remain cautious and primarily follow firm customer orders. The first overseas delivery is expected in Southeast Asia, with the Middle East and Europe under evaluation.
• Negative Sentiment: Adjusted cash gross margin declined to 41.8% from 43.6% a year earlier, mainly due to higher utility usage and pass-through effects, while customer concentration remains notable, with 510 MW of first-half orders tied to one leading internet customer. Full-year 2026 CapEx is expected to remain high at RMB 10–12 billion, and net debt stood at 4.6 times annualized adjusted EBITDA.

VNET Group Price Performance

VNET Group stock opened at $6.80 on Thursday. The stock’s 50 day moving average is $7.79 and its 200 day moving average is $9.18. VNET Group has a one year low of $6.17 and a one year high of $14.48. The firm has a market cap of $1.84 billion, a P/E ratio of -4.79 and a beta of 0.32. The company has a debt-to-equity ratio of 3.99, a current ratio of 0.99 and a quick ratio of 0.99.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on VNET. Wall Street Zen lowered VNET Group from a “hold” rating to a “sell” rating in a research note on Saturday, June 27th. Jefferies Financial Group reiterated a “buy” rating and set a $24.79 target price on shares of VNET Group in a research report on Tuesday, May 26th. Morgan Stanley reissued an “overweight” rating and set a $14.00 target price on shares of VNET Group in a report on Wednesday. Bank of America set a $16.30 price target on shares of VNET Group and gave the company a “buy” rating in a research report on Tuesday, May 26th. Finally, Weiss Ratings reaffirmed a “sell (d+)” rating on shares of VNET Group in a research note on Wednesday, July 15th. Four research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $16.90.

Insiders Place Their Bets

In other VNET Group news, Director Sean Shao sold 60,000 shares of the firm’s stock in a transaction that occurred on Monday, June 1st. The shares were sold at an average price of $1.71, for a total transaction of $102,600.00. Following the completion of the transaction, the director owned 983,820 shares in the company, valued at approximately $1,682,332.20. This trade represents a 5.75% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Corporate insiders own 12.10% of the company’s stock.

Institutional Investors Weigh In On VNET Group

Large investors have recently modified their holdings of the company. BNP Paribas Financial Markets grew its holdings in VNET Group by 674.8% during the 2nd quarter. BNP Paribas Financial Markets now owns 3,343,088 shares of the information technology services provider’s stock worth $23,067,000 after acquiring an additional 2,911,604 shares during the period. JPMorgan Chase & Co. lifted its stake in VNET Group by 1,750.9% in the fourth quarter. JPMorgan Chase & Co. now owns 2,502,622 shares of the information technology services provider’s stock valued at $21,172,000 after buying an additional 2,367,410 shares during the period. Bank of America Corp DE boosted its holdings in shares of VNET Group by 288.5% during the 2nd quarter. Bank of America Corp DE now owns 2,577,675 shares of the information technology services provider’s stock worth $17,786,000 after buying an additional 1,914,201 shares in the last quarter. UBS Group AG grew its position in shares of VNET Group by 73.2% during the 3rd quarter. UBS Group AG now owns 4,283,660 shares of the information technology services provider’s stock worth $44,250,000 after buying an additional 1,809,987 shares during the period. Finally, National Bank of Canada FI acquired a new position in shares of VNET Group during the 3rd quarter valued at $11,843,000. 72.83% of the stock is currently owned by institutional investors and hedge funds.

About VNET Group

VNET Group, Inc (NASDAQ: VNET) is a leading carrier-neutral internet data center (IDC) services provider in China. Established in 1999 and headquartered in Beijing, the company delivers a full spectrum of infrastructure solutions that support the growing digital economy. Its core offerings include data center colocation, managed hosting, network connectivity, and disaster recovery services designed to meet the performance and reliability requirements of enterprise and internet content customers.

The company’s product portfolio spans private cloud, public cloud and hybrid cloud deployments, enabling clients to scale computing resources on demand.