Megaport shares have been on fire this month. Can they keep going?
The post Up 50% this month, is it too late to buy Megaport shares? appeared first on The Motley Fool Australia. –
The Megaport Ltd (ASX: MP1) share price has been in sensational form this month.
Since the start of July, the elasticity connectivity providerâs shares have rallied a massive 55% higher.
This has been driven largely by the release of a stronger than expected quarterly update.
Can the Megaport share price keep rising?
The good news is that one leading broker believes that the Megaport share price is far from peaking.
According to a recent note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target on the companyâs shares to $9.60.
Based on the current Megaport share price of $8.50, this implies potential upside of 13% for investors.
What did the broker say?
Goldman was impressed with Megaportâs performance in the fourth quarter and appears confident that its strong revenue growth will continue. It commented:
The improvement in the sales cadence of core products (ex MVE) across both direct/indirect channels was the key highlight of the result, offsetting the marginally weaker momentum in MVE product
Nevertheless, we do see this as a net improvement for the sales trajectory, particularly given uncertainty following recent MP1 mgmt. changes and slowing US enterprise IT spending (GS tracker). We now forecast FY23/24/25E revenue growth of +39/35/30%, with the partner channel and MVE products remaining key medium term drivers.
In addition, the broker was pleased with its surprise operating profit and believes this âde-risks funding concernsâ and should be a catalyst to closing “the valuation gap between unprofitable/profitable tech.”
All in all, Goldman is bullish on the companyâs outlook and the Megaport share price. It concludes:
We remain positive on the product leadership of the company, and the rapidly growing NaaS/SD-WAN addressable markets, while await further updates on the revenue growth strategy (incl. MVE/Partner channel ambitions) at the August result. Stay Buy
The post Up 50% this month, is it too late to buy Megaport shares? appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.