Sometimes stocks wander down due to no information. That's probably part of the story here, but analysts have also pushed out NXT's profit timeline a bit. Now consensus is for negligible earnings in 2015 whereas last month consensus was for $6.5m. Not a big change (sales estimate down from $87m to $84m), but still a delay.
But analysts remain very positive -- 6 buy, 1 hold -- with average target price around $3/sh.
Patersons initiated coverage last week (probably not among the 7 above) with a target price of $2.76. They believe NXT will grow its business nicely over the medium term with significant leverage in its business model "to generate significant, recurring earnings from FY16 and beyond." Paterson's even suggests NXT's business in cloud computing "offers considerable blue-sky potential".
There are two other potential upside features of NXT that some may have overlooked: 1. LOCAL STORAGE TLS became a customer because some clients wanted local storage rather than a centralized national location. NXT has high quality localized operations.
2. NON-US FIRM Some of NXT's main competitors arriving in OZ are American (e.g. Rackspace). Yet US cloud providers are under a cloud (pardon the pun) because of recent news that US government departments have searched their US-based data without the usual targeted evidence request. Some observers have suggested the US gov't would also require US firms to give them access to non-US data sites. It's enough of a worry that Verizon recently challenged this claim (see link below). However, the US gov't assumes oversight of US firms' overseas operations on other corporate activity (kickbacks, etc). Therefore, some clients might shy away from US providers until the US gov't confirms Verizon's claims (which will never occur).
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