Nextdc Limited (NXT) AI Stock Analysis

• Market Cap: $7.12B
• Dividend Yield: N/A
• Average Volume (3M): 2.54M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.13
• Revenue Growth: -2.69%
• EPS Growth: -17.50%
• Country: AU
• Employees: 310
• Sector: Technology
• Sector Strength: 62
• Industry: Real Estate - Services
• EPS (TTM): -0.11
• Shares Outstanding: 641,277,900
• 10 Day Avg. Volume: 2,021,436
• 30 Day Avg. Volume: 2,537,996
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 17.29
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $18.69
• Price Target Upside: 68.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

Nextdc Limited exhibits strong revenue growth and operational efficiency but faces significant profitability challenges, as evidenced by its negative net income and return on equity. The technical indicators suggest a bearish trend, with the stock trading below key moving averages. Valuation is concerning due to a negative P/E ratio and the lack of dividend yield. While the balance sheet is solid with manageable leverage, strategic management of capital investments is crucial to improve financial stability.

Positive Factors

Analyst Recommendation

Buy recommendation for NEXTDC Ltd (NXT.AX) suggests confidence in the company's future prospects.

Expansion

NEXTDC is undertaking a capital raise to fund the acquisition of new data center development sites in Asia, signaling expansion into new markets.

Performance

NEXTDC reported a strong FY24 result with underlying Sales and EBITDA surpassing expectations, indicating robust financial performance.

Negative Factors

Capital Expenditure

Significant capex guidance for FY25, combined with lower EBITDA, is limiting potential improvements in NEXTDC's financial profile.

FY25 Guidance

FY25 guidance for NEXTDC is below expectations on net revenue and EBITDA, reflecting a slower ramp in the order book.

Revenue Outlook

Slower than expected net-revenue outlook and delayed ramp profile contribute to meaningful EBITDA downgrades for NEXTDC.

Nextdc Limited Business Overview & Revenue Model

Company Description

Nextdc Limited (NXT) is a leading provider of data center services in Australia, specializing in the design, construction, and operation of premium data centers. The company focuses on delivering reliable and scalable infrastructure solutions to support a diverse range of industries, including information technology, telecommunications, and financial services. With a network of strategically located facilities across major Australian cities, Nextdc ensures optimal connectivity and security for businesses requiring high-performance data environments.

How the Company Makes Money

Nextdc Limited generates revenue primarily through the leasing of data center space and the provision of associated services. The company's revenue model is built on offering colocation services, where clients rent space for their servers and IT infrastructure within Nextdc's facilities. In addition to colocation, Nextdc provides ancillary services such as connectivity solutions, managed services, and power provisioning. Key revenue streams include monthly recurring charges for space and power usage, as well as fees for additional services like cross-connects and remote hands support. The company benefits from partnerships with major telecommunications carriers and cloud service providers, which enhance its service offerings and expand its customer base. Factors such as increasing demand for cloud computing, data storage, and digital transformation initiatives contribute significantly to Nextdc's earnings growth.

Nextdc Limited Financial Statement Overview

Summary

Nextdc Limited shows robust revenue growth and strong operational efficiency, as reflected in its EBITDA margin. However, the company faces profitability challenges with negative net income, affecting return on equity. The balance sheet is solid with a high equity ratio and manageable leverage, yet negative free cash flow indicates substantial capital investment requirements. Strategic capital management will be crucial for future financial stability.

Income Statement

Nextdc Limited experienced a solid revenue growth of 11.58% from 2023 to 2024. However, the net profit margin is negative due to consistent net losses, indicating challenges in achieving profitability. The company's EBITDA margin of 53.86% for 2024 is strong, suggesting effective operational management, yet the gross profit margin has decreased to 15.05%, showing increased cost pressures.

Balance Sheet

The company has a healthy equity ratio of 68.37%, indicating a strong equity base relative to total assets. The debt-to-equity ratio of 0.41 is manageable, suggesting moderate leverage. However, the negative return on equity of -1.24% reflects the impact of net losses on shareholder returns.

Cash Flow

Nextdc's operating cash flow to net income ratio is not meaningful due to negative net income, though operating cash flow remains positive. Free cash flow is significantly negative, reflecting high capital expenditures that could be strategic but strain cash resources. The lack of free cash flow growth highlights ongoing liquidity challenges.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
404.34M	362.37M	291.04M	246.06M	200.78M
	Gross Profit
60.86M	75.92M	79.37M	54.19M	48.57M
	EBIT
28.50M	50.00M	54.73M	35.56M	34.09M
	EBITDA
229.95M	174.07M	156.34M	136.98M	97.74M
	Net Income Common Stockholders
-44.15M	-25.64M	9.14M	-23.63M	-45.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.24B	765.84M	456.56M	652.33M	892.94M
	Total Assets
5.22B	3.85B	2.98B	2.64B	2.66B
	Total Debt
1.46B	1.44B	1.14B	860.45M	875.07M
	Net Debt
218.89M	676.23M	679.06M	208.12M	-17.87M
	Total Liabilities
1.65B	1.57B	1.28B	980.69M	976.10M
	Stockholders Equity
3.57B	2.28B	1.70B	1.66B	1.68B
Cash Flow		Free Cash Flow
-809.66M	-579.21M	-459.80M	-191.10M	-349.99M
	Operating Cash Flow
128.79M	126.79M	122.04M	127.39M	54.71M
	Investing Cash Flow
-950.91M	-710.02M	-599.93M	-318.50M	-404.70M
	Financing Cash Flow
1.29B	893.06M	286.98M	-55.33M	844.93M

Nextdc Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 11.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:NXT, the sentiment is Neutral. The current price of 11.12 is above the 20-day moving average (MA) of 11.11, below the 50-day MA of 12.67, and below the 200-day MA of 15.51, indicating a neutral trend. The MACD of -0.52 indicates Negative momentum. The RSI at 44.95 is Neutral, neither overbought nor oversold. The STOCH value of 60.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:NXT.

Nextdc Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TNE	70 Outperform	€9.18B	77.40	34.02%	0.89%	17.97%	14.29%
MP1	70 Outperform	$1.68B	276.52	3.84%	―	3.02%	55.33%
Sector *	59 Neutral	$10.73B	10.22	-6.68%	3.02%	7.43%	-11.37%
BTH	55 Neutral	AU$176.66M	―	-33.75%	―	-11.19%	-174.51%
NXT	52 Neutral	$7.12B	―	-2.06%	―	-2.69%	-17.50%
DUB	40 Underperform	AU$99.69M	―	-131.93%	―	15.31%	61.52%

Nextdc Limited Corporate Events

NEXTDC Director’s Interest Update: Performance Rights Allocation

NEXTDC Limited announced a change in the director’s interest, with Craig Ian Scroggie acquiring 3,633,720 Performance Rights under the company’s Growth Incentive Plan. This allocation is part of NEXTDC’s strategy to align executive interests with company growth, potentially impacting the company’s operational focus and stakeholder confidence as these rights are set to vest in February 2030.

AustralianSuper Increases Stake in NEXTDC Limited

AustralianSuper Pty Ltd has increased its voting power in NEXTDC Limited, a company known for its data center services, from 6.29% to 7.48%. This change in substantial holding reflects a significant shift in AustralianSuper’s investment strategy, potentially impacting NEXTDC’s shareholder dynamics and market perception.

State Street Increases Stake in Nextdc Limited

Nextdc Limited has seen a change in the interests of a substantial holder, with State Street Corporation and its subsidiaries now holding an 8.36% voting power in the company, up from 7.35%. This increase in voting power may influence the company’s decision-making processes and reflects a significant level of confidence from a major institutional investor, potentially impacting Nextdc’s market positioning and stakeholder dynamics.

Nextdc Director Increases Stake, Signaling Confidence in Growth

Nextdc Limited has announced a change in the director’s interest notice, revealing that Mrs. Maria Leftakis has increased her holdings in the company. Mrs. Leftakis acquired an additional 15,000 shares directly and 2,915 shares through The Leftakis Super Fund, reflecting a vote of confidence in the company’s future prospects. This acquisition could signal positive sentiment towards Nextdc’s market positioning and growth potential.

NEXTDC Unveils Growth Incentive Plan to Retain Key Talent

NEXTDC Limited has introduced a Growth Incentive Plan (GIP) aimed at retaining its executive leadership team amid increasing global competition for talent. The plan is designed to drive growth and align executive rewards with shareholder value creation. The GIP includes a one-off grant of conditional rights with a total value of A$150 million, subject to achieving challenging performance targets over a five-year period. This initiative highlights NEXTDC’s commitment to sustaining its growth trajectory and addressing talent retention risks as the data centre industry continues to evolve.

NEXTDC Reports Record 1H25 Results and Strategic Growth Initiatives

NEXTDC Limited announced record financial results for the first half of the fiscal year 2025, with an increase in net revenue and underlying EBITDA, despite a slight decrease in total revenue. The company has made significant capital investments, including land acquisition for a new data center in Sydney, and expanded capacity across various sites in Australia. It is progressing international expansion projects, and reaffirmed its financial guidance for FY25. Additionally, NEXTDC has introduced a Growth Incentive Plan for senior management to drive strategic growth and enhance shareholder value amidst increasing global investments in the data center sector.

Nextdc Limited Reports Strong FY25 Half-Year Performance

Nextdc Limited announced its half-year results for FY25, highlighting significant financial performance and business achievements. The announcement outlines key financial metrics and business progress, positioning the company favorably within its industry. Additionally, the release touches on the company’s ESG and WHS milestones, providing guidance for the remainder of the fiscal year. Although specific details of these highlights and guidance are not provided, the implications for stakeholders suggest continued growth and strategic focus.

NEXTDC Limited Reports Increased Losses Amid Strategic Debt Refinancing

NEXTDC Limited reported a 2% decrease in revenue for the half-year ending December 2024 compared to the same period in 2023, alongside a significant increase in net losses after tax. This financial performance is attributed to the company’s strategic move to enter a $2.9 billion syndicated debt agreement, intended to refinance existing debt and improve long-term growth capabilities. The refinancing offers greater flexibility and reduced funding costs, but also led to the write-off of unamortised transaction costs and modification gains, impacting overall profitability. No dividends were declared for this period.

Nextdc Limited Announces Change in Substantial Holder Interests

Nextdc Limited has experienced a change in the interests of a substantial holder, specifically involving State Street Global Advisors and its subsidiaries. The change reflects a shift in the voting power and relevant interests in the company’s voting securities, which could influence control over voting rights and potential decision-making processes within the firm.