Megaport Ltd. (ASX:MP1) shares closed the day down more than 20%, after the Australian network solutions provider released its Q1FY23 results. Although the earnings report showed improvements in sales and profitability, the market was hoping for more, and reacted adversely to the results.
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The company reported revenue of AU$33.7 million, representing an increase of 37% from the corresponding quarter last year and an increase of 10% from the previous quarter. Megaport delivered a normalised EBITDA of AU$1 million, which marked its second consecutive quarterly EBITDA profit. The company ended the quarter with AU$69.4 million worth of cash on hand.
Megaport share price prediction
According to TipRanks’ analyst rating consensus, Megaport stock is a Moderate Buy based on six Buys and three Holds. The average Megaport share price prediction of AU$10.87 indicates about 50% upside potential.
Megaport scores a nine out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Moreover, Megaport stock is receiving positive mentions on financial blogs. TipRanks data shows that financial blogger opinions are 82% Bullish on Megaport, compared to a sector average of 66%.
Closing remarks
Increasing interest rates and recession concerns have continued to weigh on stocks across the board. However, analysts generally believe that Megaport shares remain an attractive investment for long-term portfolios.
