Megaport Limited (ASX:MP1) Just Reported Annual Earnings And Analysts Are Lifting Their Estimates
It's been a sad week for Megaport Limited (ASX:MP1), who've watched their investment drop 14% to AU$18.38 in the week since the company reported its yearly result. Revenues were in line with expectations, at AU$312m, while statutory losses ballooned to AU$0.22 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 16 analysts covering Megaport are now predicting revenues of AU$662.6m in 2027. If met, this would reflect a sizeable 112% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Megaport forecast to report a statutory profit of AU$0.24 per share. In the lead-up to this report, the analysts had been modelling revenues of AU$611.3m and earnings per share (EPS) of AU$0.22 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
See our latest analysis for Megaport
With these upgrades, we're not surprised to see that the analysts have lifted their price target 9.4% to AU$25.19per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Megaport analyst has a price target of AU$33.52 per share, while the most pessimistic values it at AU$17.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Megaport's rate of growth is expected to accelerate meaningfully, with the forecast 112% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 24% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 26% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Megaport is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Megaport following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Megaport analysts - going out to 2029, and you can see them free on our platform here.
Even so, be aware that Megaport is showing 2 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.