MENU

Is it too late to buy Nextdc Ltd (ASX: NXT)?

The Nextdc Ltd (ASX: NXT) share price was up 9.76 per cent on Friday, adding to gains of more than 100 per cent over the past year.

Nextdc, which provides data centre outsourcing solutions, connectivity services and infrastructure management software, has a series of data centres across Australia in key locations including Brisbane, Canberra, Sydney, Melbourne and Perth.

As a provider of cloud services and solutions the company is well poised to capitalise on a growing market as businesses increase their reliance on the cloud and they further migrate their data and functions to the benefit of companies such as Nextdc.

Nextdc has been growing steadily over the last five years and is now a profitable company with a market value of about $1.8 billion.

In financial year (FY) 2017 Nextdc reported a profit of about $23 million, significantly up on the $1.8 million profit the company reported for FY 2016.

The company’s recent financial performance and its prospects of further growth have prompted optimism from analysts and brokers.

Citi recently retained its buy rating of Nextdc’s shares and lifted its price target to $7.02.

Shares in the tech company are currently trading at around $6.30.

Prospects of US equity firm Blackstone gearing up to launch a takeover bid for Nextdc spin-off  Asia Pacific Data Centre Group (ASX: AJD), as reported by News Corp (ASX: NWS), has also increased interest in Nextdc.

Although Nextdc recently rejected a chance to buyout Asia Pacific Data Centre Group it still retains a significant stake in Asia Pacific Data Centre.

There is a bit of interest surrounding Nextdc, its financial outlook remains good and if Citi’s recent price target is anything to go by there is still a healthy potential upside on Nextdc shares even at today’s price.

As such, it appears there are promising indications that Nextdc is still a buy.

The Richest Man Alive Invests in This

The richest man in the world has just launched a $100 million investment fund and investors who don't take note could miss out on a massive opportunity.

And it isn't by sheer luck. He did it by looking to the future and investing in the big ideas of tomorrow.

This could be your chance to get in on the ground floor!

Click here to discover more!

Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.