Riyadh – Mubasher: Aljazira Capital reiterated its neutral rating on Mobile Telecommunication Company Saudi Arabia (Zain KSA) after releasing its financial results for the second quarter (Q2) of 2026, which came in line with expectations.
The group’s revenue supported stronger profitability, while the increasing contribution of 5G services within the consumer segment remained a positive driver for earnings.
However, Aljazira Capital noted that margin expansion was partly driven by a temporary decline in handset sales caused by ongoing supply chain constraints, suggesting that some of the profitability gains may not be sustainable.
Looking ahead, the brokerage expects Zain KSA's leverage to remain elevated over the medium term due to continued capital expenditure (CAPEX) and working capital requirements.
Despite the company's sector-leading gross margins and positive momentum from its 5G business and Tamam fintech platform, Aljazira Capital believes the stock is fairly valued at current levels.
Based on its 2026 estimates, Zain KSA is trading at an enterprise value-to-EBITDA (EV/EBITDA) multiple of 4.5x, a price-to-earnings (P/E) ratio of 11.3x, and offers a projected dividend yield of 4.90%.
