The Megaport Ltd (ASX: MP1) share price is having a strong day on Tuesday.
In afternoon trade, the elasticity connectivity and network services interconnection providerâs shares are up 5% to $7.81.
Why is the Megaport share price shooting higher?
Todayâs strong gain by the Megaport share price is a bit of a mystery as there has been no news out of the company.
But with its shares down 60% since the start of the year, itâs possible that bargain hunters are snapping them up today.
Particularly given how several bullish brokers are predicting major share price gains over the next 12 months.
One of those brokers is Citi, which has a buy rating and $13.90 price target on the companyâs shares. Based on the current Megaport share price, this implies potential upside of 78% for investors.
Citi commented:
Looking ahead, we see an increase in partner/indirect channel contribution and MVE sales as key to support our medium-term forecasts. While we are cautious on the macro outlook, with ~35% revenue growth expected in FY23e and existing customers underpinning growth (with positive net dollar retention) we maintain our Buy rating.
Who else is bullish?
Goldman Sachs is another broker that is bullish on the Megaport share price. It currently has a buy rating and $10.30 price target on the companyâs shares.
The broker recently commented:
We remain positive on the product leadership of the company, and the rapidly growing NaaS/SD-WAN addressable markets. [â¦] Overall, we revise FY22-25E EBITDA +16% to +1% given a more disciplined cost base into FY23.
All in all, these brokers appear to believe that this could make Megaport one to consider if youâre looking for options in the tech sector and have a higher than average tolerance for risk.
The post Why the Megaport share price is up 5% and could keep climbing appeared first on The Motley Fool Australia.
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More reading
- Here are the top 10 ASX 200 shares today
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- Goldman Sachs names 2 ASX tech shares to buy now
- 3 hot small-cap ASX growth shares Firetrail’s backing right now
- Here are the 10 most shorted ASX shares
Motley Fool contributor James Mickleboro 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 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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