The NEXTDC Ltd (ASX: NXT) share price is out of form on Tuesday.
In afternoon trade, the data centre operator's shares are down 1% to $13.30.
This means the NEXTDC share price is down 5% in the space of a week.
Is the NEXTDC share price in the buy zone?
One top broker that believes the NEXTDC share price is good value is Goldman Sachs.
According to a recent note, the broker has a conviction buy rating and $14.40 price target on its shares.
Based on the latest NEXTDC share price, this implies potential upside of 8.3% over the next 12 months.
What did the broker say?
Goldman Sachs was pleased with the company's performance in FY 2021. And while NEXTDC's sales fell a touch short of the broker's forecasts, its earnings were ahead of expectations.
It commented: "NXT reported underlying FY21 Sales/EBITDA/NPAT that was -1.5%/+1.4%/+$1mn vs. GSe, with revenue at the lower end of guidance and EBITDA above the top end, with the revenue weakness attributable to lower zero margin power consumption of $4mn. 2H21 contracted MW of +4.5MW was in line with GSe +4.4MW. Cash conversion was strong, with capex of A$301mn well below GSe & guidance, attributable to covid delays."
The broker was also pleased with its guidance for FY 2022. NEXTDC is expecting revenue growth of 16% to 20% and EBITDA growth of 19% to 23%. Goldman notes that this was largely in line with its forecasts after adjusting for power pricing.
Looking further ahead, its analysts appear confident this strong form can continue, which supports the buy rating it has on the NEXTDC share price.
Goldman is forecasting an EBITDA compound annual growth rate (CAGR) of 20% through to FY 2024. At that point, the broker expects the company's EBITDA to have grown to $232 million. This compares very favourably to FY 2021's EBITDA of $133.9 million.
In light of this, the broker feels NEXTDC represents "the most compelling growth story in our coverage."
