Goldman Sachs says beaten-up Megaport share price has 100% upside

There’s optimism on the outlook for the tech company’s share price.

| More on:
A man raises his reading glasses in a look of surprise.

Image source: Getty Images

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

Key points

  • Megaport shares have descended 26% in the past month 
  • Despite this, Goldman analysts are tipping the company's share price to bounce by 107%
  • Analysts sees a $129 billion per year market opportunity for the company 

The Megaport Ltd (ASX: MP1) share price has struggled in the past month, but could it go higher?

Megaport shares are currently trading at $6.31, a 3.37% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.34% in the red today.

Let’s check the outlook for Megaport.

Could the Megaport share price recover?

Megaport shares have plummeted 26% in the last month but one global investment firm is predicting a turnaround.

Megaport is a a global connectivity company with more than 700 data centres around the world.

Analysts at Goldman Sachs have rated the Megaport share price as a buy and have placed a $13.10 price target on the company’s shares. This represents a 107% upside on the current share price.

The company is tipped to expand rapidly in the future as public cloud adoption and multi-cloud usage increase. Goldman sees Networking as a Service (NaaS) as a key driver of the company’s growth in the future.

The broker sees these factors could create a $129 billion per year market opportunity for the company overall.

Megaport reported $27.9 million in revenue in the third quarter of FY22, a 5% or $1.4 million boost on the previous quarter. The company also reported it had $88.8 million of cash available.

Megaport sold 1577 new services in the quarter, up 6% on the previous quarter, to take total services to 25,936. More uptake of multi-cloud connections via the Megaport Cloud Router and Megaport Virtual Edge products contributed to this growth.

Share price snapshot

The Megaport share price has descended 58% in the past year, while it has fallen 66% in the year to date.

For perspective, the ASX 200 has shed more than 1% in the past year.

Megaport has a market capitalisation of $987 million based on its current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

a man sits at a computer in deep thought with hand on chin in a darkened room as though it is late and night and he is working on cybersecurity issues.
Earnings Results

ReadyTech share price slips despite earnings increase

The software as a service provider has notched a solid year.

Read more »

A man looks surprised as a woman whispers in his ear.
Earnings Results

Whispir share price roars higher on record revenue

Here's how FY22 panned out for Whispir.

Read more »

A player pounces on the ball in the scoring zone of the field.
Technology Shares

Down 40% this year, should you pounce on this ASX tech share now before it becomes profitable?

This up-and-coming ASX tech share is eyeing off profitability on the horizon.

Read more »

man looking through binoculars
Earnings Results

Nearmap share price on watch as revenue leaps 29%

Here's how Nearmap glided through FY22...

Read more »

A woman looks in anticipation at her laptop, watching eagerly.
Technology Shares

The Appen share price is down 20% in a month. Is it going lower?

Will Appen's shares continue to slide?

Read more »

Three businesspeople leap high with the CBD in the background.
Technology Shares

3 ASX tech shares leaping by more than 10% on Tuesday

It's a good day to be invested in these technology stocks.

Read more »

A man sits in front of his laptop computer with his head on his hand and a sad, dejected look on his face after seeing how far Whitehaven shares have fallen today
Technology Shares

Why is the BrainChip share price sinking today?

We check what's going on with the tech company's shares on Tuesday.

Read more »

A young woman with long brown hair opens her green eyes widely expressing surprise
Share Fallers

The 4DS Memory share price just crashed 65%. What happened?

The ASX tech share has been working to develop an Interface Switching ReRAM specifically developed for Storage Class Memory applications.

Read more »