May 14, 2026/Cordros Report
We revise our 2026E estimates for MTNN following its Q1-26 earnings release. Specifically, we raise our 2026E revenue growth forecast to 24.0% y/y (Prev: +22.6% y/y), reflecting stronger subscriber momentum across both voice and data, with net adds now projected at 7.83m and 4.77m, respectively (Prev.: +5.71m and +3.73m). The upward revision to our subscriber forecasts reflects MTNN’s strong commercial execution and continued market share gains. Meanwhile, we lower our EBITDA margin estimate by 50bps to 55.0% (Prev: 55.5%), reflecting renewed inflationary pressure, particularly from higher energy costs. Nonetheless, we raise our year-end target price to NGN1,047.85/s (Prev.: NGN975.47/s), implying a 25.5% upside from the current price (NGN835.00) and maintain our “BUY” rating on the stock. Our revised TP reflects higher EBITDA projection (+29.4% y/y) and a lower WACC of 19.9% (Prev.: 21.3%) on lower Beta assumptions. Overall, we continue to view MTNN favourably given its network scale, operating leverage, and resilient data revenue outlook. On our revised 2026E estimates, MTNN is trading at 10.4x P/E and 5.5x EV/EBITDA compared to MEA peer averages of 13.7x and 5.8x, respectively.
Stronger revenue outlook; EBITDA margin revised to 55.0%: We raise our 2026E service revenue growth forecast to 24.0% y/y (Prev.: +22.6% y/y), reflecting upward revisions to subscriber net additions across both voice and data to 7.83 million and 4.77 million, respectively, versus previous estimates of 5.71 million and 3.73 million, alongside projected blended ARPU growth of 17.9% y/y. Across key revenue lines, we forecast growth in data (+36.1% y/y | 58.7% of revenue), voice (+13.8% y/y | 32.6% of revenue), digital (+42.2% y/y | 2.2% of revenue), and other revenue (+26.8% y/y | 4.9% of revenue). Meanwhile, fintech revenue is now projected to decline by 47.5% y/y (1.6% of revenue), reflecting the suspension of Xtratime services. On profitability, we now expect EBITDA margin to expand by 229bps y/y to 55.0% (Prev.: +280bps y/y to 55.5%), reflecting the expected impact of higher energy costs in H2-26. Below the operating line, we project net finance costs to decline by 26.8% y/y, supported by lower leverage and relative currency stability. Overall, we forecast EPS growth of 51.3% y/y to NGN80.30 in 2026E.
Leverage metrics set to improve further in 2026E: MTNN’s leverage profile is expected to improve further in 2026E, supported by lower debt balances and stronger profitability. The full repayment of foreign currency (FCY) loans totaling USD105.00 million in Q1-26 further strengthens this position by reducing FX related funding risk and lowering sensitivity to currency volatility. We model a decline across all leverage metrics, with debt to equity (including leases) projected to decline to 2.0x in 2026E (2025FY: 5.3x), while net debt to equity and net debt to EBITDA should reduce to 1.5x and 0.6x, respectively (2025FY: 4.2x and 0.8x). Excluding lease liabilities, D/E should print at 0.2x, while net debt to equity and net debt to EBITDA are projected at negative 0.3x and 0.1x, respectively, reflecting a net cash position.
Valuation: Our target price is NGN1,047.85/s, derived from a 60/40 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN1,104.89/s) and FCFE (NGN1,066.05/s) estimates, assuming a 19.9% WACC, 22.0% CoE and 4.0% terminal growth rate. Similarly, our multiple based FV was derived from a blend of EV/EBITDA (NGN882.69/s) and P/E (NGN1,100.15/s) estimates, utilising MEA peer averages for both factors (5.8x and 13.7x, respectively) as multipliers.
