I like how Morningstar mention lack of moat without detail on any competitors or the SDN landscape.

We believe Megaport is an early mover and leader in an attractive, nascent industry. However, we believe its connectivity services cannot be protected from commoditization and subsequent price-based competition. As such, we do not believe Megaport has an economic moat.

We believe network effects and switching costs would be the most likely moat sources, but we don’t see convincing evidence to believe these form a moat for Megaport.

Looks like the onus is on us to do the research on competitors and do the digging ourselves such as KPIs, ports, ease of use, reliability, reviews etc... which is admittedly very hard to find. One wonders if the analysts are being paid too much if they can't do a SWOT analysis.

One that comes to mind is the SDN interconnect offering from PCCW Global that is part of PCCW (Pacific Century Cyberworks) led by non other than Richard Li who is the son of Li Kha-Shing, one of the richest men in Hong Kong.

On the face it looks pretty basic. And the investor report unfortunately does not go into much detail

But I think the Li family will be very well resourced in both wealth and management expertise and hence PCCW Global could become a very credible threat to Megaport despite being a few years behind.

Well worth researching the Li family and PCCW Global/Console connect if you have time. Would also be interesting to see how Megaport responds to a threat that literally has oodles of cash lying around.

Also can't forget that Equinix has an offering too.

If I get time and find more info, will start a separate straw on Megaport competitors if someone hasn't already.

Apparently Infratil acquired 80% of Console Connect from HKT in July 2023. So my above post about PCCW/HKT is out of date.

I should really be posting under IFT but there are more views on the MP1 threads..

From below as mentioned, this is much smaller than Megaport. This seems like a "cheap" stake when compared to Megaport. Only difference is Console Connect owns and maintains some infrastructure including fibre and subsea cables.

EBITDA forecast of 40-50m - good to see some financials but the Infratil financial updates don't show much detail on Console connect.

https://infratil.com/news/strategic-investment-in-console-connect/

Console Connect owns its global IP network which has been developed over many years and has been a top 10 Tier 1 network globally for the last 5 years, serving ~17% of all internet traffic and reaching over 150 countries. Integration with an owned Tier 1 IP network, as well as long-term integrated access to a global backbone network, provides a clear point of differentiation for Console Connect given its extensive network coverage and superior unit economics.

Infratil will initially acquire an 80% stake in Console Connect from HKT for US$160 million. Infratil will also enter into a strategic partnership with HKT, with both jointly investing up to US$295 million over a 2-year period following completion of the acquisition to accelerate Console Connect’s growth through:

- Joint sales and marketing via an HKT-supported approach to offer critical fibre infrastructure and IP access to its existing and new enterprise & wholesale customers.

- Investment in new subsea cable systems and network development to increase Console Connect’s network capacity, resiliency, and reach.

- Continued investment in research and development (‘R&D’) of Console Connect’s technology platform to expand and enhance its product offerings.

Following this initial period of growth investment, Infratil will own between 60-80% of Console Connect, with HKT holding the remainder. Ultimate ownership stakes will reflect the relative equity contributions of each party over this initial 2-year period. As the majority investor, Infratil will have governance rights consistent with its interest and, working alongside HKT, will continue to drive the development and growth of the business.

Infratil’s initial investment implies a 3.4x EV / FY2022A revenue multiple for Console Connect, with target returns of 15 – 25% over 10 years. The purchase price includes an earnout and is subject to usual completion adjustments for cash, net debt, and net working capital.

Packetfabric is the one competitor that i would be keen to research more - megaport's previous CEO is now its CEO and also it hired quite a few ex-megaport employees..

The numbers look better than my typing skills!

I was also expecting a weak quarter and after getting treatment with Nanosonics missed guidance. I thought I would probably reduce some risk in my portfolio by reducing some potential high multiple stocks with lot of expectation built into and potential for a disappointing market. Guess what Megaport fit that bill perfectly yesterday and subsequently, I reduced my holding, and as expected based on my Luck...it goes 25% up. Luckily for me I didn't go hard on my real portfolio but reduced only 10% and kept 90% of my holding but still as with human nature, I am sad about losing the paper profit on 10% of my holding than happy about gaining on 90% of my holdings.... Well, such is life. Will write about my thoughts on Megaport result later as time permits

@Valueinvestor0909 Had a similar experience yesterday with $PLY … was trying to top up IRL about 10% ahead of results. The order didn’t make it through and stock price jumped 20%. Feeling sad I missed the jump on the top up but should probably look at the other side and see the 20% (paper) gain that I made on the stock i do hold (and 80% gain since first purchase) as well as some further validation of my investment thesis.

Its funny how much emotions and perspectives impact one’s view investing even more than the numbers and analysis. Thanks for sharing … taking a different perspective has made me feel much better about what I have rather than what I missed out on.

Now share price has exceeded my Margin of Safety target so its a matter of waiting for a bit of a pull back and finding something else to do with the hard earned in the mean time.

Old news but this is from Morgans web site giving Megaport the weaker trading update which didn't happen

Then Jun Bei Lu from Tribeca added further fuel to the sellers when she also stated weaker update on Ausbiz which I only heard now on that forum

Now I know why the share price trended down during the period.

My buy during that period not so silly after all.