Kaspi: A Long-Term Compounder Navigating A Year Of Noise

Arda Solmaz
20 Followers
(12min)

Summary

  • Kaspi.kz reported a 21% rise in Q1 2025 revenue and a 16% increase in net income. Still, management lowered its full-year guidance due to emerging headwinds.
  • Kaspi trades at approximately 8× forward earnings and around 5× adjusted core free cash flow, exceptionally low multiples given its growth profile and strong network effects.
  • While geopolitical risk is a real factor, the primary bear cases regarding competition and market saturation appear overstated, as evidenced by Kaspi's dominant user engagement metrics, which are far superior.
  • Kaspi's powerful three-sided network effect among consumers, merchants, and fintech services creates a wide moat, positioning it well for continued long-term compounding.
Panoramic view of Baiterek Tower on Nurjol Boulevard. Urban landscape of sunny winter day in city of Astana, Nur-Sultan, Kazakhstan.

LARISA SHPINEVA/iStock via Getty Images

Investment Thesis

Joint Stock Company Kaspi.kz's (OTC:KSPI) biggest strength is its powerful three-sided network effect and the seamless integration of all its services, with Kaspi Pay at the core. The more people use the app, the more merchants join the Marketplace. As more

This article was written by

20 Followers
I’m a long-term, value-focused investor and the founder of Pilea Invest, a private family investment fund. Over the past five years, I’ve built a concentrated, research-driven portfolio rooted in fundamentals, with a strong focus on free cash flow, capital allocation, and downside protection. My approach is inspired by the thinking of Warren Buffett and Charlie Munger, looking for businesses I can understand, with durable economics, disciplined leadership, and a fair or undervalued price. My investment lens is business-owner driven. I aim to understand how a company makes money, where the risks are, and whether management has a track record of rational decision-making. I started writing to improve my thinking and connect with other long-term investors who care about real analysis. On Seeking Alpha, I want to share clear ideas and highlight overlooked opportunities that I think are worth paying attention to.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of KSPI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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