Treasure Chest | 10:30 AM
FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Today's idea is Megaport
-Share price swings and renewed broker confidence
-Megaport's expanding reach through agents and new cloud providers
-Rising demand from artificial intelligence and data growth
-Moving up the stack into higher-value services
By Danielle Ecuyer
FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts.
Whose Idea Is It?
RBC Capital
The subject:
Megaport's growth outlook is not fully appreciated by the market
More info:
Megaport ((MP1)) is a network-as-a-service provider that makes it faster and cheaper for businesses to connect directly to major cloud platforms like Amazon, Microsoft, Google, and Oracle.
Operating from hundreds of data centres worldwide, the service provided is cloud-and data-centre neutral, giving customers flexible, on-demand access across multiple providers.
As explained by RBC, Megaport's elastic connectivity product also reduces the complexity and cost of private cloud links, helping companies adopt multi-cloud strategies and support data-heavy applications such as artificial intelligence.
With a scalable model and low capital requirements per new site, Megaport generates high incremental margins once fixed costs are covered, creating a clear path to stronger recurring earnings and free cash flow.
Share Price Recovery and Early Upgrades
After plumbing share price lows of around $7 in January, following management's disappointing FY26 guidance at the November 2024 AGM, Ord Minnett stepped in with an upgrade to Buy from Hold.
The call came after the stock had declined more than -40% over the prior six months. Citi also brushed off negative sentiment around potential demand risks from Deep Seek, arguing at the time weakness was a buying opportunity.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE