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Megaport Ltd. (AU:MP1)
ASX:MP1
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Megaport (MP1) AI Stock Analysis

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AU:MP1

Megaport

(Sydney:MP1)

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Neutral 53 (OpenAI - 4o)
Rating:53Neutral
Price Target:
AU$15.00
▼(-6.25% Downside)
Megaport's overall stock score is primarily influenced by its solid revenue growth and strong gross profit margin, which are offset by significant challenges in profitability and cash flow conversion. The technical analysis shows a mixed picture with some positive trends but lacks strong momentum. Valuation is a major concern due to the extremely negative P/E ratio and lack of dividend yield, indicating potential risks for investors.

Megaport (MP1) vs. iShares MSCI Australia ETF (EWA)

Megaport Business Overview & Revenue Model

Company DescriptionMegaport Limited provides elastic interconnection services to the enterprises and service providers in Australia, New Zealand, Hong Kong, Singapore, Japan, North America, and Europe. It operates a platform that enables customers to connect their network to other services, as well as creates agile network that connects in multiple regions. The company also offers Megaport Virtual Edge, an on-demand and vendor-neutral Network Function Virtualization service that enables branch-to-cloud connectivity on Megaport's global software-defined network; internet exchange services; and Megaport Marketplace, an online hub the interconnects service providers and enterprise customers. In addition, it provides cloud connectivity solutions; and virtual routing for cloud networking. The company was founded in 2013 and is headquartered in Fortitude Valley, Australia.
How the Company Makes MoneyMegaport makes money primarily through its subscription-based model where businesses pay for access to its Software Defined Network (SDN) services. The company's revenue streams are driven by monthly recurring charges for its core connectivity products, including Virtual Cross Connects, Internet Exchange services, and Cloud Routing solutions. Megaport's partnerships with major cloud service providers like AWS, Google Cloud, and Microsoft Azure enhance its value proposition, making it easier for customers to establish direct and secure connections to these platforms. Additionally, Megaport benefits from its extensive partner ecosystem, which includes data centers and service providers, further expanding its service offerings and customer base.

Megaport Earnings Call Summary

Earnings Call Date:Aug 20, 2025
(Q2-2024)
|
% Change Since: |
Next Earnings Date:Feb 20, 2026
Earnings Call Sentiment Positive
The earnings call highlighted substantial revenue and EBITDA growth, successful product launches, and improved financial health. However, challenges with KPI metrics and increased expenditures were noted. Overall, the positive achievements significantly outweighed the challenges.
Q2-2024 Updates
Positive Updates
Record Revenue Growth
Revenue reached $48.6 million, a 31% increase year-on-year, marking an $11.6 million rise.
EBITDA Surge
EBITDA increased by 529% to $15.1 million, reflecting a significant $12.7 million year-on-year growth.
Cash Flow Improvement
Total cash flow was $7.3 million, up $19.2 million year-on-year, showcasing a significant turnaround.
Strong Financial Position
Cash at bank was $62.5 million, up $7.3 million quarter-on-quarter, indicating a healthy fiscal status.
Global WAN Success
The launch of Global WAN resulted in the largest deal in company history, with $1.4 million in annual recurring revenue contracted over three years.
Product Innovation and Expansion
Launched several new products including Megaport Internet, 100-gig VXCs, and a 400-gig U.S. backbone upgrade is underway.
Cost Management and Efficiency
Operating cash flow increased to $15.2 million, up $15 million year-on-year, due to ongoing cost control and revenue growth.
Negative Updates
Challenges with KPI Metrics
Historically reported KPIs presented challenges due to cloud port consolidation and inappropriate signals, leading to a shift to revenue-generating metrics.
Increased Expenditure
Incremental costs for sales and marketing and customer success staff impacted EBITDA quarter-on-quarter, reflecting reinvestment in the go-to-market engine.
Delayed Headcount Cost Impact
New hires landed towards the end of Q2, meaning the full cost impact will be seen in Q3.
Company Guidance
In the recent earnings call for MP1.AX, CEO Michael Reid provided detailed guidance on multiple financial and operational metrics, highlighting a significant turnaround and growth trajectory for the company. The company reported a revenue of $48.6 million for the second quarter of FY '24, marking a 31% increase year-on-year, alongside an EBITDA of $15.1 million, reflecting a substantial 529% rise. The net cash flow improved by $6.9 million year-on-year, while operating cash flow surged to $15.2 million. The company maintained its revenue guidance for FY '24 at $190 million to $195 million and EBITDA between $51 million and $57 million, despite revising CapEx expectations down to $20 million-$22 million. The shift in focus to revenue-generating KPIs was emphasized, with total services reported at 748, and customer numbers and ports also seeing increases. With a strong emphasis on go-to-market strategies and hiring, particularly in North America, the company is poised to continue its growth momentum. The call also pointed to the success of the newly launched Global WAN product, which resulted in the largest deal in Megaport's history, valued at $1.4 million in annual recurring revenue.

Megaport Financial Statement Overview

Summary
Megaport shows strong revenue growth and a high gross profit margin, but struggles with profitability and cash flow conversion. The balance sheet is stable with low leverage, but the negative return on equity indicates inefficiencies in generating shareholder returns.
Income Statement
60
Neutral
Megaport has shown a consistent revenue growth trajectory, with a 9.74% increase in the latest year. The gross profit margin is strong at 83.05%, indicating effective cost management. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -0.13% and a negative EBIT margin. The EBITDA margin remains positive at 19.34%, suggesting some operational efficiency.
Balance Sheet
55
Neutral
The company's debt-to-equity ratio is relatively low at 0.16, indicating a conservative leverage approach. However, the return on equity is negative, reflecting challenges in generating returns for shareholders. The equity ratio stands at 68.66%, showing a solid equity base relative to total assets.
Cash Flow
50
Neutral
Operating cash flow is strong, with a coverage ratio of 1.19, indicating sufficient cash generation to cover net income. However, free cash flow has declined by 20.09%, and the free cash flow to net income ratio is below 1, suggesting potential issues in converting earnings into cash.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue227.06M227.06M195.27M153.08M109.73M78.28M
Gross Profit86.54M188.56M158.86M6.10M-20.42M-22.77M
EBITDA41.98M43.92M40.39M28.79M-6.32M-36.69M
Net Income-292.00K-292.00K9.61M-9.77M-48.49M-55.00M
Balance Sheet
Total Assets260.20M260.20M214.70M202.23M220.38M220.56M
Cash, Cash Equivalents and Short-Term Investments102.07M102.07M72.43M48.45M82.55M136.31M
Total Debt28.30M28.30M15.79M19.96M27.27M15.76M
Total Liabilities81.52M81.52M60.62M74.30M78.14M40.15M
Stockholders Equity178.69M178.69M154.08M127.93M142.25M180.41M
Cash Flow
Free Cash Flow45.73M33.95M30.32M-24.57M-49.71M-30.79M
Operating Cash Flow67.22M68.25M50.17M8.23M-9.83M-8.29M
Investing Cash Flow-34.29M-34.29M-19.85M-32.73M-50.26M-22.44M
Financing Cash Flow-4.40M-6.03M-7.43M-10.40M5.87M4.87M

Megaport Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.00
Price Trends
50DMA
15.14
Positive
100DMA
14.29
Positive
200DMA
11.82
Positive
Market Momentum
MACD
0.31
Negative
RSI
57.43
Neutral
STOCH
70.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:MP1, the sentiment is Positive. The current price of 16 is above the 20-day moving average (MA) of 15.13, above the 50-day MA of 15.14, and above the 200-day MA of 11.82, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 57.43 is Neutral, neither overbought nor oversold. The STOCH value of 70.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:MP1.

Megaport Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
AU$105.09M15.3813.74%70.80%
64
Neutral
AU$586.81M32.747.85%1.06%-30.96%
53
Neutral
$2.57B390.50-0.15%16.28%-102.98%
42
Neutral
AU$29.13M-8.10-22.47%84.44%
41
Neutral
AU$41.40M1.49-38.38%
35
Underperform
AU$4.05M-1.45-50.39%-74.68%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:MP1
Megaport
15.77
8.23
109.15%
AU:FCT
FirstWave Cloud Technology
0.01
-0.01
-50.00%
AU:SEN
Senetas Corporation Limited
0.03
<0.01
50.00%
AU:NNG
Nexion Group Ltd.
0.02
0.00
0.00%
AU:B4P
Beforepay Group Limited
2.12
1.20
130.43%
AU:TYR
Tyro Payments Ltd.
1.11
0.19
20.65%

Megaport Corporate Events

Megaport Limited Announces Cessation of Restricted Stock Units
Sep 5, 2025

Megaport Limited announced the cessation of 32,780 restricted stock units due to the lapse of conditional rights, as the conditions for these securities were not met or became incapable of being satisfied. This announcement may impact the company’s capital structure and could have implications for stakeholders regarding the company’s equity management and strategic financial decisions.

The most recent analyst rating on (AU:MP1) stock is a Hold with a A$15.50 price target. To see the full list of analyst forecasts on Megaport stock, see the AU:MP1 Stock Forecast page.

Megaport Announces Director’s Interest Change
Sep 5, 2025

Megaport Limited announced a change in the director’s interest, specifically involving Michael Reid. The change pertains to the lapse of 2,301 performance restricted stock units (PRSUs) that were due to vest on September 1, 2025, as the conditions for vesting were not met. This adjustment reflects the company’s adherence to its Restricted Stock Unit program and shareholder-approved plans, potentially impacting the director’s stake and signaling the company’s commitment to performance-based incentives.

The most recent analyst rating on (AU:MP1) stock is a Hold with a A$15.50 price target. To see the full list of analyst forecasts on Megaport stock, see the AU:MP1 Stock Forecast page.

Megaport Limited Announces Quotation of New Securities
Sep 3, 2025

Megaport Limited has announced the quotation of 870,034 fully paid ordinary securities on the Australian Securities Exchange (ASX) as of September 3, 2025. This move is part of the company’s strategy to enhance its financial flexibility and potentially expand its market presence, offering stakeholders an opportunity to engage with the company’s growth trajectory.

The most recent analyst rating on (AU:MP1) stock is a Buy with a A$16.77 price target. To see the full list of analyst forecasts on Megaport stock, see the AU:MP1 Stock Forecast page.

Megaport Issues Restricted Stock Units to Boost Employee Incentives
Sep 2, 2025

Megaport Limited announced the issuance of 372,869 restricted stock units under an employee incentive scheme, which are not intended to be quoted on the ASX. This move is part of the company’s strategy to incentivize and retain talent, potentially impacting its operational efficiency and market positioning by aligning employee interests with company performance.

The most recent analyst rating on (AU:MP1) stock is a Buy with a A$16.77 price target. To see the full list of analyst forecasts on Megaport stock, see the AU:MP1 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 20, 2025