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Highlights
- Tuas Ltd's stock has surged 120% in the last year, with shares hitting a record high of AU$6.19.
- Investors are excited after the company posted strong first-quarter revenue and EBITDA growth.
- Brokers maintain buy ratings, despite concerns that shares may be overvalued at current levels.
Tuas Ltd (ASX:TUA) shares are poised to close the week on a positive note, up 6% to AU$6.01, following a significant rise earlier today when the stock hit a record high of AU$6.19. The latest gains represent a remarkable 120% increase in the company’s stock price over the last 12 months. To put this into perspective, an investor who purchased AU$10,000 worth of Tuas shares a year ago would now see their investment worth AU$22,000.
Why Is Tuas Ltd Seeing Such Decent Performance?
Tuas’ impressive share price performance is largely driven by its latest financial update, ahead of its annual general meeting. The company, which spun off from TPG Telecom Ltd (ASX:TPG), revealed a strong start to FY 2025. The key highlights from the release include:
- First-quarter unaudited revenue of $35.5 million, which would annualize to $142 million. This is a 21.2% increase from FY 2024 revenue of $117.1 million. The company attributes this growth to continued mobile service growth, product upgrades, and network improvements.
- EBITDA growth: Tuas also reported an unaudited EBITDA of $16.1 million for the quarter, annualizing to $64.4 million. This represents a solid 29.6% increase compared to the $49.7 million EBITDA recorded in FY 2024. As a result, Tuas’ EBITDA margin has improved, now standing at 45.35%, up from 42.4% in FY 2024.
The standout point in Tuas’ latest update, however, is the announcement of a net profit after tax (NPAT) for the first quarter. This marks a significant milestone for the company, as it has posted losses since its demerger. The achievement of profitability has investors optimistic that Tuas has entered a new phase of growth, potentially unlocking further value for shareholders.
What’s Next for Tuas Ltd Shares?
While Tuas shares are currently on a strong upward trajectory, some brokers are cautious about the stock’s valuation. Both Citi and Morgan Stanley have assigned "buy" ratings to the stock, but with price targets of $5.55 and $5.50, respectively. At the current price of $6.01, these targets imply a potential downside of more than 8%.
However, it’s worth noting that these broker price targets were set before Tuas’ most recent update. As analysts digest the latest results, it’s possible that their price targets could be revised upward in the coming weeks, reflecting the company’s improved performance and profitability.
