Megaport (MP1) – Appeal emerges
January 29, 2025
Megaport provides on-demand interconnection and internet exchange services – ‘network as a service’ – to enterprises and service providers in Australia, New Zealand, Hong Kong, Singapore, Japan, North America, Italy, and elsewhere in Europe. It operates a software-defined network platform that enables customers to connect their network to other services, as well as agile networking. The company was founded in 2013 and is headquartered in Fortitude Valley in Brisbane.
Ord Minnett has reassessed its investment thesis on Megaport following the more than 40% fall in the network-as-a-service provider’s share price over the past six months. We have concluded the risk-reward equation is now much more attractive, with the risks to key metrics, such as annual recurring revenue (ARR) growth, and the impact of cost growth on margins, now discounted in the stock price. This leads us to raise our recommendation on Megaport to Buy from Hold, while our price target is maintained at $8.00.
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