Macquarie Telecom Group Ltd
Cannacord Genuity has upped its price target from $26.80 to $27.10 and maintained its buy rating on telecommunication and hosting services company Macquarie Telecom Group Ltd after its FY18 results were reported to be in line with progress.
Cannacord labelled Macquarie Telecom’s operations as “smooth sailing” after FY18 revenue of $233.6 million came in just above the broker’s forecast of $232.4 million with hosting revenues up 17% year-on-year.
The broker thinks the company’s cash conversion of 109% is “extremely healthy” – well ahead of its 99% forecast, with Cannacord increasing its group revenue forecast for FY19 by 2%, also nudging up its FY19F EBITDA forecast by 1%.
On Cannacord’s forecasts Macquarie Telecom shares are trading on a FY19 EV/EBITDA multiple of 9.2x, but the broker estimates its shares could trade on a 10.8x multiple, even allowing a 15% discount for illiquidity.
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