Due to the marketâs sudden aversion to loss-making tech companies, you wonât be surprised to learn that the Megaport Ltd (ASX: MP1) share price has been hammered in 2022.
Since the start of the year, the leading cloud connectivity and networking solutions providerâs shares have lost a disappointing 72% of their value.
Is the Megaport share price weakness a buying opportunity?
While the decline in the Megaport share price is disappointing for shareholders, it could be a buying opportunity for others. In fact, if the team at Goldman Sachs are on the money, there could be some huge gains ahead for investors.
According to a recent note, its analysts have a buy rating and $13.10 price target on the companyâs shares.
Based on the current Megaport share price of $5.41, this implies potential upside of 140% for investors over the next 12 months.
Why is Goldman bullish?
Goldman is bullish on the Megaport share price due to the company’s first-mover advantage in an industry benefiting from long term structural tailwinds. These are the adoption of public cloud (and multi-cloud usage) and the transition towards Networking as a Service (NaaS).
The broker highlights that the latter is being driven by the increased prevalence of hybrid working and cloud-based applications. These are putting strain on legacy network designs and impacting performance. All in all, the broker feels this is providing Megaport with an âimmenseâ growth opportunity.
Goldman explained:
MP1 is benefiting from its first-mover advantage, and two structural tailwinds that accelerated through covid-19, including: (1) The adoption of public cloud & multi-cloud usage; and (2) The growth in Networking as a Service (NaaS).
The opportunity for further growth is immense (GSe A$129bn p.a. spent on fixed enterprise networking across MP1 geographies).
The post Could an ‘immense’ opportunity mean the Megaport share price is now a buy? appeared first on The Motley Fool Australia.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now
See The 5 Stocks
*Returns as of June 1 2022
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- Analysts name 3 buy-rated ASX growth shares for July
- Megaport share price slumps 5% despite takeover speculation
- 5 things to watch on the ASX 200 on Wednesday
- Analysts say these ASX growth shares have huge upside potential
- Why are ASX tech shares struggling today?
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.
from The Motley Fool Australia https://ift.tt/0WoHM81
Leave a Reply