Is the NEXTDC (ASX:NXT) share price in the buy zone?

The NEXTDC Ltd (ASX:NXT) share price could be charging notably higher from here according to one leading analyst…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you're looking to boost your portfolio with some growth shares, then you might want to look at the one listed below.

Here's why the NEXTDC Ltd (ASX: NXT) share price could be in the buy zone for growth investors.

nextdc share price

Image source: Getty Images

What is NEXTDC?

NEXTDC is a data centre operator that provides businesses with a range of services. This includes Data-Centre-as-a-Service (DCaaS), Data Centre Infrastructure Management-as-a-Service (DCIMaaS), and Professional Services.

In respect to DCaaS, this service provides businesses with hyper-scale colocation. This is secure, high-density data centre space with redundant power supply and support services. It sees customers host their own infrastructure, using the facility as an extension of their own property.

Whereas DCIMaaS sees the company's ONEDC cloud platform allow the centralised management of data centre assets in NEXTDC facilities. This delivers businesses real-time intelligence to their decision-makers, for a monthly subscription per rack.

Demand for its services has been growing at a rapid rate in recent years and shows no signs of slowing. In fact, a significant amount of future capacity has already been contracted to its customers. This alone has the potential to underpin solid earnings growth in the coming years.

Management is also aiming to bolster this with potential expansions internationally and has its eyes on the Singapore and Tokyo markets. Earlier this year the company opened offices in these markets.

Is the NEXTDC share price good value?

One leading broker that sees a lot of value in the NEXTDC share price is UBS. It currently has a buy rating and $15.40 price target on its shares.

Based on the current NEXTDC share price of $11.01, this price target implies potential upside of almost 40% over the next 12 months.

UBS appears confident that NEXTDC is well-placed for growth over the coming years.

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

More on Growth Shares

A female ASX investor looks through a magnifying glass that enlarges her eye and holds her hand to her face with her mouth open as if looking at something of great interest or surprise.
Growth Shares

2 under-the-radar ASX shares with bags of potential

It could be worth getting better acquainted with these shares.

Read more »

Happy man working on his laptop.
Growth Shares

Brokers rate these 3 top ASX shares as buys in April

Experts are optimistic about what these businesses can achieve.

Read more »

a man wearing casual clothes fans a selection of Australian banknotes over his chin with an excited, widemouthed expression on his face.
Growth Shares

3 ASX shares that could double over the next decade (or much sooner)

These shares could be positioned to deliver strong returns in the future. Let's find out why.

Read more »

A golden egg with dividend cash flying out of it
Growth Shares

Forget Easter eggs, these ASX shares could be your best buys this month

These shares could be top buys after the Easter break.

Read more »

Two smiling work colleagues discuss an investment at their office.
Growth Shares

3 amazing ASX growth shares I'd buy and hold for the next decade

These shares could be worth holding tightly to for the long term.

Read more »

Wife and husband with a laptop on a sofa over the moon at good news.
Growth Shares

$5,000 invested in Droneshield shares 4 months ago is already worth…

Investors will be thrilled!

Read more »

Person with a handful of Australian dollar notes, symbolising dividends.
Dividend Investing

1 ASX dividend share and 1 ASX growth stock to buy in April

These ASX shares deliver a one-two punch: income now, growth later.

Read more »

Increasing white bar graph with a rising arrow on an orange background.
Growth Shares

Here's what I consider to be the very best ASX 200 share to buy in April

This business looks heavily undervalued to me.

Read more »