Our $120 TP for Kaspi is based an equal weighting of a DCF valuation ($125), our 2026E EV/Revenue valuation based on a 2.5x target multiple, and our 2026E P/E valuation based on a 8.5x target multiple. Our EV/Revenue multiple is below its average of 4.1x as the company has already penetrated most of its home market in Kazakhstan and its international expansion to Turkey is as yet unproven. Our P/E multiple is slightly below its historical average of 9.1x to account for the high-inflation environments in Kazakhstan and Turkey, rate implications, and any potential impact from the Ukraine/Russia war and political risks. We justify our valuation based on Kaspi's market leadership, high-growth profile, and 30%+ profit margins, with additional opportunities remaining to expand domestically and abroad.

We rate Kaspi High Risk because of the emerging market risks involved with investing in Kaspi and Kazakhstani companies. We note for instance, Kaspi’s exposure to a higher inflationary environment in Kazakhstan and a more uncertain macro environment.

Risks to our target price include: 1) ability to retain and grow customer base and expand beyond Kazakhstan; 2) ability to retain and grow merchant base; 3) technology infrastructure and cybersecurity; 4) uncertain macro and consumer discretionary spending environment, particularly being based in and generating predominantly all of its revenue in an emerging market; 5) financial services and regulatory risk, including ability to maintain required licenses; 6) regulatory risk in Kazakhstan; and 7) Potential risk from Russia and geopolitical conflicts.