Broking house Morgans has released a report on the emerging companies on the ASX, noting that volatile share market conditions have hit the sector hard.
That said, they have identified a number of companies they believe could outperform over the next 12 months.
I've focused in on three in particular which Morgans believes will rerate substantially.
Let's see who they like.
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Megaport Ltd (ASX: MP1)
Megaport acquired the Latitude compute-as-a-service company during FY26 adding its services into Megaport's high-speed network.
Morgans said the acquisition had "materially changed" Megaport's business, winning a large number of contracts in the second half of the financial year, "and in our view more to come''.
The broker said it expects earnings to increase rapidly:
FY27 will be a year of delivering and reinvesting a larger than usual share of incremental earnings back into the business, but we estimate $624m EBITDA in FY28 with the full run-rate of strategic contract wins (announced to date) and GPU pool still ramping. This further lifts to $770m in FY29, once the GPU pool has stabilised, a 10x increase from the $77m EBITDA in FY26.
Morgans said reinvestment into Megaport's sales team should help accelerate revenue growth in FY27, while building out an ecosystem of services should also help.
The broker said they "remain positive on the structural thematics and AI and cloud momentum.
Morgans has a price target of $26.40 on Megaport shares.
Nextdc Ltd (ASX: NXT)
The broker said FY26 was a significant year for Nextdc, with contracted megawatts up 3.5x.
Morgans predicts EBITDA to increase from $250 million in FY26 to more than $1.1 billion by FY30, "but [Morgans] also [flags] scope for further acceleration to NXT's current expected deployment profile''.
The broker said Nextdc was trading at earnings ratios "materially cheaper" than its peers.
Morgans has a price target of $23.45 on Nextdc shares.
Superloop Ltd (ASX: SLC)
Morgans says Superloop is gaining market share in the broadband market, with strong momentum in late FY26 understood to have continued into the current financial year.
They added:
On that basis, our analysis suggests SLC could be adding close to 9% of new NBN orders to their customer base vs its ~5% market share. We think this is in an environment where churn is elevated due to price hikes being implemented in July and we consider SLC to have emerged as a net-beneficiary of this trend.
Morgans has a price target of $4.15 on Superloop shares.
