What’s in store for the Megaport share price this earnings season?

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.

The Megaport Ltd (ASX: MP1) share price has struggled year to date, but could this earnings season be a turning point?

The technology company’s share price has slid 66% since the beginning of the year. In early trade on Tuesday, the Megaport share price is down 7.4% to $6.26.

Let’s check the outlook for the Megaport share price.

What could be ahead for Megaport?

Megaport is among multiple shares Goldman Sachs equity strategist Matthew Ross believes are cycling “very strong revenue comparisons” this earnings season, according to a report in The Australian.

Other companies he named included NextDC Ltd (ASX: NXT), City Chic Collective Ltd (ASX: CCX), Reliance Worldwide Corp Ltd (ASX: RWC), Carsales.com Ltd (ASX: CAR), and Altium Ltd (ASX: ALU).

Ross expects these companies to report strong revenue in the second half of the financial year despite margin pressures, according to the publication.

Commenting on the outlook for the earnings season at a broader level, Ross said:

Coming out of the pandemic many firms have seen margins expand given the combination of strong demand and short supply, but as disposable income comes under more pressure and supply returns, we expect margins will start to normalise.

Megaport is due to release its quarterly report prior to market open on Wednesday.

Meanwhile, Firetrail analysts are optimistic about the outlook for Megaport and have added the company’s shares to their fund. A recent change to the Megaport’s sales model could add “significant value”, according to the analysts.

In a memo, the Firetrail team said:

The fund has added capital to the Megaport position on the back of the share price weakness and our conviction in the medium-term outlook for the company.

Megaport share price

The Megaport share price has fallen more than 60% in the past year. However, in the past month, it has jumped 21%.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has lost 9% in the past year.

Megaport has a market capitalisation of just under $1 billion based on the current share price.

The post What’s in store for the Megaport share price this earnings season? appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, MEGAPORT FPO, and Reliance Worldwide Corporation Limited. The Motley Fool Australia has recommended MEGAPORT FPO, Reliance Worldwide Corporation Limited, and carsales.com Limited. 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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