It has been a disappointing year for the NEXTDC Ltd (ASX: NXT) share price.
After being up 14% to a record high of $14.09 at one stage, the data centre operator's shares are now on course to end the year with a small decline.
Image source: Getty Images
Will 2022 be better for the NEXTDC share price?
The good news is that a number of brokers believe the NEXTDC share price is undervalued at the current level, which could bode well for its performance in 2022.
For example, a note out of Macquarie Group Ltd (ASX: MQG) last week reveals that its analysts have an outperform rating and $16.10 price target on the company's shares.
Based on the current NEXTDC share price of $12.17, this implies upside of 32% for the company's shares over the next 12 months.
Macquarie was pleased with NEXTDC's recent acquisition of its first edge data centre. Edge data centres serve areas with populations of 10,000 to 1 million people. The broker sees a significant opportunity in this market as the cloud computing boom continues, complementing its leadership position in capital cities.
Who else is bullish?
The team at Citi is also bullish on the NEXTDC share price. Its buy rating and $15.40 price target implies potential upside of 27% for investors. Citi is positive on the company due to the shift to the cloud and digitisation trends.
The broker commented: "With bookings going forward skewing towards wholesale/hyper-scale, we expect revenue per MW to decline, however expect strong earnings growth underpinned by accelerating cloud adoption and digitisation."
Finally, analysts at Goldman Sachs are also very positive and have a conviction buy rating and $14.40 price target on the company's shares. Goldman advised that it sees "NXT continuing to grow EBITDA at c.20%" through to FY 2024 from $134 million to $232 million.
All in all, if these brokers are on the money, the NEXTDC share price could have a much better year in 2022.
