Shares in Superloop Ltd (ASX: SLC) piled on the gains this week after the company announced a solid profit result as well as a $165 million acquisition.
But despite the shares piling on more than 10% gains after the company's announcements, the three analysts we've canvassed all agree there's more upside to this stock.
Firstly, let's look at what the company announced this week.
Image source: Getty Images
Solid earnings jump
On the numbers, Superloop announced that its underlying EBITDA jumped 46% to $55.8 million, while net profit was $5.1 million, compared with a loss of $7.8 million for the same period last year.
The company added 74,000 new customers in the half, a 21% gain, bringing total customers to 805,000.
Superloop also upgraded its underlying EBITDA outlook for the full year to $112 to $120 million, up from $109 to $117 million.
Managing Director Paul Tyler said regarding the results:
Superloop has delivered fantastic results for the first of half of FY26, including record organic Consumer customer growth, an increase in revenue of 23%, and an increase of 46% in underlying EBITDA to $55.8 million, leading to net profit after tax of $5.1 million for the half. Both the Consumer segment and the Wholesale segment achieved strong revenue growth, 29% and 28% respectively. Consumer added a record 49,000 customers during the half, and Wholesale experienced accelerated growth in the last two months, setting the business up for a strong second half.
New acquisition
The other news the company announced was the purchase of last mile internet provider Lightning Broadband, with that deal bringing with it a fibre to the premises network of 24,000 built lots nationally and a further 30,000 contracted lots.
Superloop said it expected synergies of $5 million to be achieved within three years, and the buyout was priced at 15 times Lightning's estimated 2027 earnings.
Mr Tyler said the deal was a crucial step in building out Superloop's "smart communities" asset base.
He added:
The combination of Lightning Broadband with Superloop's existing Smart Communities portfolio, including the acquisition of Frontier Networks during the first half, creates a serious challenger to incumbents. With a combined built and contracted book of approximately 170,000 lots, we have clear visibility of long-term sustainable growth." "Lightning Broadband's strength in multi-dwelling units complements our expertise in broadacre, build-to-rent and Purpose-Built Student Accommodation. Our existing fibre network, including 2,500km of metropolitan footprint, enables direct connection to Lightning Broadband buildings, driving cost synergies and increasing network resilience.
Shares looking cheap
So what do the analysts think of all this?
We looked at research notes published by Macquarie, Morgan Stanley, and UBS, and they're all in agreement.
Both Macquarie and UBS have a 12-month price target of $3.50 on Superloop shares, while Morgan Stanley has a price target of $3.60.
This compares with just $2.85 currently.
Morgan Stanley said they were attracted to the company "as the low-cost operator, especially in selling a commoditised but essential service like broadband''.
They added:
Given the high incremental margins outlined above, we feel Superloop is well positioned to respond to any price competition.
UBS said the first half result was "pleasing", beating consensus estimates across the board.
Meanwhile, Macquarie said the company "materially outperformed market expectations" in its consumer and wholesale businesses.
