Summary
- Shares of Megaport (ASX:MP1) are already down 9.21 per cent in January 2021. In the last six months, the stock was down 2.9 per cent.
- Megaport shares appear to have lost value on concerns around the upcoming government of Democrats in the US, which is expected to increase regulations for the technology companies.
- Since its ASX listing in 2015, the company has not attained profitability; however, the firm said that it is adequately funded for the coming few years.
Shares of Megaport Ltd (ASX:MP1) are already down 9.21 per cent in January 2021. In the last six months, the stock was down 2.9 per cent. On Wednesday, 13 January 2021, the shares of the provider of elastic interconnection services closed at A$12.90, down 0.11 points, or 0.85 per cent, against the previous closing on Tuesday, 12 January 2021.
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Even though no major announcement was recently made by the company, Megaport shares appear to have lost value on the concerns around the upcoming government of Democrats in the US, which is expected to increase the number of regulations for the technology companies.
Megaport’s performance in 2020
The company’s revenue saw a growth of 66 per cent Y-o-Y to A$58 million in FY20. The change was on account of a rise in uptake of the Megaport’s services as technology companies shifted their workers to work-from-home arrangements. In 1Q FY21, the company’s product uptake saw a sharp rise with quarterly 566 new Ports, up 10 per cent QoQ, and 138 new customers added up 7 per cent QoQ. Both of these were record quarterly increases. Of this total number, North America made a significant contribution, representing 63 per cent new customer growth, 58 per cent Port growth, and 61 per cent new services growth. North America accounted for 47 per cent of the total revenue.
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READ MORE: Megaport (MP1) Reports Record Growth During September 2020 Quarter
Financial outlook
In its annual general meeting (AGM) held in October 2020, Megaport said that it was on its way to profitability. The company also said it would push towards meeting breakeven on its EBITDA in FY21. In the coming period, the core growth strategy of the company will be around its ‘Connected Edge’ platform. Since its ASX listing in 2015, the company has not attained profitability. However, the firm said that it was adequately funded for the coming few years.
READ MORE: Megaport Shares the Results of Share Purchase Plan
