Megaport (ASX: MP1) (OTCQX: MGPPF) shares jumped 33% today. The MP1 share price rise was off the back of their announcement that everything's going rather better than expected. So, sales are up, gross profit up, EBITDA up and so on. Further, this is for the period under way - they expect to announce more along with the results in a month's time or so.
As to what Megaport does: “Megaport 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.” For those of us not technically minded it's part of the nuts and bolts of making the internet faster. Similar to (but not the same as) Cloudflare and the like. We can imagine that this is indeed a decent enough business to be in at present. Yes, prices continue to decline - everything computing does - while the size of the market continues to expand.
Megaport share price from ASXThe MP1 announcement: “Megaport Limited ACN 607 301 959 (Megaport or Company) (ASX: MP1) announces that, as a result of continued improvement in the Company's operating metrics and financial performance, the Company is upgrading its FY23 Normalised EBITDA to be in the range of $19M to $21M (compared to previous guidance of $16M to $18M). Reported EBITDA Guidance is now expected to be in the range of $24M to
$26M. The Company also confirms that it was net cash positive in Q4FY23 inclusive of redundancy payments of approximately $2.6M.”
That's perhaps not enough to explain the 33% price leap, but they do go on to say that the next full year looks to be better as well - and that might justify the price movement.
It's worth adding that this is a continuation of a turnaround at Megaport: “Megaport (ASX: MP1) shares have jumped 40% today on the release of projections about future performance. Of course, those predictions, especially of the future, are difficult. But companies do as well as they can given circumstances. The basic background at Megaport is that the business has been in trouble for some time. Therefore strategic review, change how things are done, hope it all gets better. That may sound cynical but that is how things are done - and such reviews do, sometimes, actually turn a business around. Which is what Megaport is suggesting will indeed happen.” That was only 3 months ago. So, we can take this statement today as being, really, that the turnaround is really taking hold, it's not a flash in the pan.
Which is news that perhaps can justify that 33% rise today in Megaport.
