Megaport gets its Midas touch back after a tough start to year
Brisbane-based tech company Megaport has regained its Midas touch and turned a $3 million improvement in its expected earnings into more than $420 million in market value.
Tech entrepreneur Bevan Slattery.(Image, supplied)
It hasn’t been a great year for the company, though.
Its share price started to tank at the end of January when it updated the market on its financials. Then the company secretary resigned, followed by chief executive Vincent English and for a while the company’s founder and chair Bevan Slattery took control of day-to-day operations.
But this week, Megaport has staged a stunning comeback after it reported an upgrade to its normalised earnings which would now be in the range of $19 million to $21 million. That was only a difference of $3 million in previous guidance but it appears the market considered it to be worth a lot more.
It also said its 2024 guidance was now higher than the previous expectations of between $41 million and $46 million.
It also terminated a $25 million debt facility because it was no longer needed.
Its share price rocketed. It jumped from $6.72 to $9.48 today, which added about $420 million to its market value for a $3 million gain in earnings.
Shares are up 53 per cent since January, but are still well behind the peak in November 2021 when they hit $21.46.
Goldman Sachs retained its buy rating with a price target of $9.30 and Morgans lifted its price target to $10.
UBS is even more bullish with a price target of $12.50.
