I see massive issues with the companies previous valuation.
You have to take into account the company had a Market Cap of $1.2Billion dollars.
That was on 2016 Revenue of ~$93M, Profit of $1.7M.
2017 forecasted Revenue is ~$120M (25-31% growth). About $25-30M/year growth which is inline with the previous years sales growth.
The company has some pretty costs to overcome:
* Staff cost $23-24M/year (~$5M for facility staff/$18M for other). Looking at an increase of $1.6M/year per facility for onsite staff). Hopefully there doesn't need to be much of an increase in "other" staff costs.
* Depreciation was ~ $17M which will increase substantially going forward as the new facilities are built as the company will have buildings as well as plant to depreciate.
* Rents to APDC ~$13.2M (S1,M1,P1), Not expected to grow very much.
* Finance Costs - $11.7M in 2016, going to jump considerably in 2017.
* Even office/administrative costs were up 20% for $6M in 2016.
I can't help but compare this against say Vocus, $3.3B Market Cap, $830M Revenue, $100M profit. Where did you really expect NXT share price/Market Cap could grow too?
Gotta actively think about supply and demand in the market too.
* Look @ Western Australia/Canberra where is the demand?
* Sydney/Melbourne have had great demand, but now lets think about supply. Sydney has had recently Global Switch complete a massive new facility. Equinix likewise has just finished SY4 and we are going to do S2, then you have your Digital Realty, etc's too. (lots of supply).
Even at the current SP I think NXT is pretty much priced to perfection. I think on balance they will get there, but you wouldn't want to miss a target. We really need Sydney & Melbourne to keep delivering the bacon.
NXT Price at posting:
$3.07 Sentiment: Hold Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)