Is the Megaport share price a buy following the company’s latest results?

The Megaport Ltd (ASX: MP1) share price soared on the back of the company’s FY22 results, but is it a buy?

The technology company’s share price surged 10% on Tuesday. What’s more, the Megaport share price has rocketed 37.4% in the past month.

So what’s the outlook for Megaport following the results?

What do analysts predict for Megaport?

UBS analysts have expressed optimism on Megaport’s FY22 earnings. In a recent note, UBS said the result “helps build [a] bridge to future accelerating growth”.

As The Motley Fool reported on Tuesday, Megaport reported a 40% lift in revenue in FY22. However, the net loss was $48.5 million, 12% better than the $55 million loss in FY21.

Megaport reported the total number of customers jumped 16% in FY22, while services sold lifted 26%.

In comments on Megaport’s results cited by The Australian, UBS said:

Good additional detail around cohort analysis, LTC/CAC, PartnerVantage training… strong ongoing growth in rev/customer within cohots, reducing levels of churn after two years within a cohort, and improving pipeline for PartnerVantage sales force.

LTC refers to loan to cost, while CAC relates to the customer acquisition cost. With regard to LTC and CAC, Megaport said in its results on Tuesday: “early days LTV to CAC reflective of meteoric growth in scale of reach (lower GM) and investment in customer acquisition in new markets”.

Megaport added:

Apparent slight drop in LTV to CAC reflects additional investment in sales in FY22 to stand up channel.

Megaport share price snapshot

The Megaport share price slumped 49.7% in the past year, while it has shed nearly 52% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has lost 7% in the past year.

Megaport has a market capitalisation of more than $1.4 billion based on the current share price.

The post Is the Megaport share price a buy following the company’s latest results? 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 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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