In a report released today, Daley Li from Bank of America Securities maintained a Buy rating on GDS Holdings (GDS – Research Report), with a price target of $49.30.
Daley Li has given his Buy rating due to a combination of factors including GDS Holdings’ solid financial performance and growth prospects. The company reported a 9% year-over-year increase in revenue for its China business in the fourth quarter of 2024, along with a 14% rise in adjusted EBITDA, indicating strong operational efficiency. The management’s guidance for fiscal year 2025 suggests continued revenue growth between 9.4% and 12.3%, which aligns with market expectations, although adjusted EBITDA growth is slightly below due to the impact of asset-backed securities.
Furthermore, the international business, DayOne, in which GDS holds a significant stake, showed impressive revenue growth, driven by increased IT capacity utilization. The management’s expectation of 250MW of new commitments in 2025 and the potential for a DayOne IPO within 18 months highlight strong future growth potential. These factors, combined with the company’s strategic expansion and strong order pipeline, underpin Daley Li’s Buy rating for GDS Holdings.
In another report released today, Raymond James also upgraded the stock to a Buy with a $53.00 price target.