Insights

The Uniti (ASX:UWL) share price is up up 20% in 2021: Can it go higher?

The Uniti Group Ltd (ASX:UWL) share price is on fire on Tuesday and is racing 9% higher to a record high. Here’s why…
The post The Uniti (ASX:UWL) share price is up up 20% in 2021: Can it go higher? appeared first on The Motley Fool Australia. –

Chalk-drawn rocket shown blasting off into space

It was a very positive day of trade for the Uniti Group Ltd (ASX: UWL) share price on Tuesday.

The telecommunications provider’s shares rose 9% to a record high of $2.15 before closing at $2.10..

This means the Uniti share price is now up 20% since the start of the year.

Why is the Uniti share price surging higher?

Investors were bidding the Uniti share price higher on Tuesday after the release of its half year results. Those results revealed strong growth in revenue, earnings, and free cash flow.

For the six months ended 31 December, Uniti reported a 148% increase in revenue compared to the prior corresponding period to $54.6 million.

Thanks to stronger margins, earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 307% to $29.3 million.

Furthermore, based on its performance in December, Uniti’s annualised revenue and EBITDA run-rate was $200 million and $116 million, respectively.

It was a similar story for its free cash flow. Operating free cash flow less capital expenditure was $18.3 million for the half. But at the end of December, its annualised operating free cash flow run-rate was $72 million.

What were the drivers of its growth?

The key drivers of Uniti’s growth during the half were a series of acquisitions.

During the period, the company completed three accretive acquisitions. These were OptiComm, Harbour ISP, and the Velocity network assets from Telstra Corporation Ltd (ASX: TLS). Positively, the integration and synergy realisation plans are on or ahead of schedule for these acquisitions.

In addition to this, management notes that all of Uniti’s business units are benefiting from various strong tailwinds. These include greater digital services uptake, consumption, technology, strengthening residential property markets, and lifestyle factors. The latter are making fibre broadband an essential service.

While no guidance has been given for the full year, Uniti’s Group Managing Director and CEO, Michael Simmons is very positive on the future.

He explained: “The fact that 75% of our existing fully funded, contracted fibre order book will be deployed in the coming 5 years , and is continuing to grow at improving rates, assures our shareholders of continued steep earnings growth and free cash generation over both the near and longer term.”

Can the Uniti share price go higher?

Late last month, Bell Potter put a buy rating and $2.20 price target on its shares.

With the Uniti share price now trading within sight of this, the upside may be limited in the short term.

However, Bell Potter is likely to reassess its price target in the coming days after fully digesting the result. This could potentially lead to a higher price target. Investors may want to watch out for that.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Uniti (ASX:UWL) share price is up up 20% in 2021: Can it go higher? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!