The Megaport Ltd (ASX: MP1) share price has been caught up in the market selloff on Wednesday.
At the time of writing, the ASX 200 network-as-a-service company's shares are down 3% to $5.38.
Should you buy this ASX 200 tech share?
One leading broker that is likely to see this pullback as a buying opportunity is Morgans.
That's because, this morning, the broker released a bullish broker note relating to this tech share titled "Mega turnaround."
According to the note, the broker has retained its add rating and increased its price target to $9.00.
Based on the current Megaport share price, this implies potential upside of 67% for investors over the next 12 months.
What did the broker say?
Morgans was impressed with what it heard when the ASX 200 tech share released its quarterly update last week. It said:
In our view, MP1's Q3 result was irrelevant as management's guidance for FY23 and FY24 was well ahead of consensus expectations. The Q3 result itself was, as expected, weak. The big surprise was FY23 and FY24 Underlying EBITDA guidance, which was 45% and 89% respectively, above consensus. Revenue guidance was not provided but the bulk of the beat came from resetting the cost base.
The broker also spoke positively about Megaport's new CEO and appears to believe he can take the company forward. It adds:
Incoming CEO, Michael Reid, is known to us and is, in our view well credentialed to drive MP1 through a period of hopefully accelerating revenue growth. Michael Reid was Chief Revenue Officer at Cisco owned ThousandEyes. In his ~2 years in the role he grew Annualised Recurring Revenue by 2.4x. Sales were almost entirely via direct model. We expect direct sales will once again become the primarily focus of MP1 sales over the coming few years.
