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Is fast-growing tech share Megaport the next Altium?

In morning trade the Megaport Ltd (ASX: MP1) share price has stormed notably higher shortly after the open.

At the time of writing the shares of the global provider of elastic interconnection services are up 6.5% to $3.92.

Why is the Megaport share price up 6.5% today?

This morning Megaport released an announcement relating to its North America business.

According to the release, as of the end of December the company’s North America business had increased its monthly recurring revenues (MRR) by 80% since the end of June to $1 million.

Management believes this achievement represents a major growth milestone for Megaport, with MRR in North America now doubling over the last eight months.

The company’s chief executive officer, Vincent English, said, “This is a fantastic result that we believe validates the continued substantial investment we have made in the North American market. Our investment in our North American sales resources, as well as the continued expansion of our network footprint, has enabled us to greatly accelerate our Monthly Recurring Revenue in the first half of Fiscal Year 2019.”

Mr English also believes that Megaport’s alignment of its go-to-market plans with major cloud service providers means it can continue to offer more cloud on-ramp choices than any other global interconnection fabric.

He added: “This level of choice combined with the capabilities enabled by Megaport Cloud Router has made it easier than ever for companies to rapidly connect to the services they need on demand.”

Should you invest?

Although admittedly it is from a small base, I still believe the level of growth in North America has been outstanding.

Pleasingly, it is still only scratching at the surface of a massive opportunity for cloud interconnection and appears to be ahead of the competition with its offering, putting it in a great position to capture a decent share of the fast-growing market.

Overall, while it is certainly on the speculative side, thanks to the cloud computing boom, I believe it has the hallmarks of being another tech success story like Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium and Appen Ltd. 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 Scott Phillips.

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