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

A man raises his reading glasses in a look of surprise.A man raises his reading glasses in a look of surprise.

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 post Goldman Sachs says beaten-up Megaport share price has 100% upside appeared first on The Motley Fool Australia.

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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.

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