KSPI

We rate Joint Stock Co Kaspi.kz (KSPI) as a Buy with a composite score of 65.3/100 at a current price of $72.02. The stock scores above average across the majority of our six quantitative factors and ranks #277 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (96th percentile) and quality (89th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (68/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Joint Stock Co Kaspi.kz holds a mid-tier position (#32 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 65.3/100 places it at rank #277 in our full 7,333-stock universe. With a $18.0B market capitalization, Joint Stock Co Kaspi.kz operates at meaningful scale within the Services sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 14%, though momentum at the 46th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 88% (+28.2pp vs sector) narrow to operating margins of 81% (+77.4pp vs sector) and net margins of 42.5%, yielding a gross-to-net conversion rate of 48%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $72.02, Joint Stock Co Kaspi.kz appears undervalued relative to its fundamentals. Our value factor score of 96/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at EV/EBITDA of 0.9x (discounted to peers), P/B of 4.8x, P/S of 0.7x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Low uncertainty rating to Joint Stock Co Kaspi.kz. The company exhibits strong financial stability with a beta of 0.96, conservative leverage (4% D/E), and a stability factor in the 77th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 77th percentile with quality at the 89th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 88% provide a buffer against cost pressures; conservative leverage (4% D/E) limits balance sheet risk; above-average stability (77th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Joint Stock Co Kaspi.kz's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 278.6%, disciplined leverage (4% D/E), a 7.71% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Joint Stock Co Kaspi.kz meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 7.71% dividend yield, and the combination of 50.5% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Joint Stock Co Kaspi.kz receives a Buy rating with a composite score of 65.3/100 (rank #277 of 7,333). Our quantitative framework assigns a Narrow Moat (68/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 71/100.

Our analysis supports a constructive view on Joint Stock Co Kaspi.kz. The combination of identifiable competitive advantages, low uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.