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Down 20% in 2022, is the Aussie Broadband share price a no-brainer buy?

We take a look at the outlook for the Aussie Broadband share price.
The post Down 20% in 2022, is the Aussie Broadband share price a no-brainer buy? appeared first on The Motley Fool Australia. –

The Aussie Broadband Ltd (ASX: ABB) share price has slumped this year, but could it have better days ahead?

The broadband provider’s share price has slid 20% year to date. At the close of trade on Monday, the company’s shares finished down 4.77% at $3.79.

So what is the outlook for Aussie Broadband?

Could the Aussie Broadband share price go higher?

Aussie shares climbed 17% from the first trading day of the year to 29 April before plunging dramatically at the start of May. They shed 28% alone on 2 May after the release of the company’s quarterly results.

Despite this, some analysts predict the company’s share price could take a turn for the better.

Ord Minnett recommends shareholders buy Aussie Broadband and has placed a $5.10 price target on it. This is a nearly 34.5% upside on the current share price.

Analysts claim industry data shows the company has increased its market share, as my Foolish colleague James reported.

The team at Jeffries also rates the Aussie Broadband share price as a buy with a $5 price target in early May. However, the broker cut its total broadband subscription forecast from 595,000 to 586,000.

In recent news, Aussie Broadband has opened a new national warehouse in Perth to deliver services faster across Western Australia. Managing director Phillip Britt noted this would save the company time and money:

It’s also cheaper to send items directly from the Perth warehouse to our customers in WA, rather than from our Morwell distribution centre in regional Victoria.

In the third quarter of FY22, Aussie Broadband reported a 47% year-on-year increase in broadband services to 548,911. Total services lifted 42% to 697,083, including voice, mobile and Fetch.

However, the company downgraded the guidance on its full-year earnings to between $27 million and $28 million. Previously, the company had forecast an earnings before interest, tax, depreciation and amortisation (EBITDA) of between $27 million and $30 million.

Share price snapshot

The Aussie Broadband share price has rocketed nearly 36% in the past year, but it is down 5.5% in the past month.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has lost 1.2% in the past year.

Aussie Broadband has a market capitalisation of $945.74 million based on its current share price.

The post Down 20% in 2022, is the Aussie Broadband share price a no-brainer buy? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Aussie Broadband right now?

Before you consider Aussie Broadband , you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Aussie Broadband wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Leading brokers name 3 ASX shares to buy today
These ASX 200 companies just lost market share to a small-cap rival
3 quality ASX All Ordinaries shares that defied today’s sell-off

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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