The Megaport Limited (ASX:MP1) Interim Results Are Out And Analysts Have Published New Forecasts

Investors in Megaport Limited (ASX:MP1) had a good week, as its shares rose 3.9% to close at AU$13.23 following the release of its half-year results. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Megaport after the latest results.

See our latest analysis for Megaport

Taking into account the latest results, the consensus forecast from Megaport's 15 analysts is for revenues of AU$196.0m in 2024. This reflects a solid 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 59% to AU$0.082. In the lead-up to this report, the analysts had been modelling revenues of AU$195.8m and earnings per share (EPS) of AU$0.10 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at AU$14.58, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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$18.41 per share, while the most pessimistic values it at AU$11.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Megaport's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Megaport's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 33% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 15% per year. So it's pretty clear that, while Megaport's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Megaport going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Megaport Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.