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$20.44
Average Intrinsic Value
14.3%
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#Bull Case
Added 3 weeks ago

UBS Research out Friday says that its reassessed MP1's SD-WAN revenue potential.

"In our view, MP1 being added to Cisco's global price list in Jul-21 should be a major tailwind and the opportunity could be very large, but we need to assess initial momentum. We remain positive on the story, however we want to see signs that the new sales initatives in place (mainly around the indirect channel) are driving stronger port growth (to be assessed at 4Q21 on 22nd Jul) – Buy."

UBS Valuation $17.10     
 

Fridays close: Down 1.9% to $14.92 

I did own MP1 but the long term nature of it, as in really long term, as its infrustructure, before the price would start to move up made me wonder if I could enjure the short term pain when theres other companies to buy. So I sold.
Currently I dont have spare cash to invest (and if I did it would go into the US market direct)
But for other people this might be a good to put on the Radar, or have another look at it.

Mark 

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#Bull Case
Added 2 months ago

MP1 continue to impress, earlier this month MP1 released its third quarter update and revealed an 8% quarter on quarter increase in monthly recurring revenue (MRR) to $6.8 million.

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#Bull Case
Last edited 5 months ago

Great opportunity here to buy in $12~ range, Company stands to benefit from macro trends going forward, Company last year raised $ to actually expand/grow their business while many others raised $ to just survive, Company has great leadership. Like APX and ALU (currently buys imo) this is a no brainer for a long term growth portfolio,I still don't understand why so many people are downvoting buys on ALU at $28~ that's crazy to me anyway there is only a handful of companies that can grow above 20-30% for a sustained number of years I believe this to be one. While everyone is worrying about a looming crash I'm busy buying gl.

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#ASX Anns x 3 ~ 19/1/21
Added 5 months ago

Appendix 4C Quarterly cash flow report for entities subject to Listing Rule 4.7B...see attached

Global Update ~sorry from ASX site~

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02331589-2A1275629?access_token=83ff96335c2d45a094df02a206a39ff4

Executive Update

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02331591-2A1275631?access_token=83ff96335c2d45a094df02a206a39ff4

HIghlights of 4C

? Positive net cash from operations of $0.9M for the quarter.

? Revenue for the quarter was $18.7M, an increase of $1.4M or 8% QoQ.

? MRR for the month of December 2020 was $6.3M, an increase of $0.5M, or 8% QoQ.

? Total Installed Data Centres was 386 at the end of the quarter, an increase of one QoQ. This was the net result of the addition of four new sites and the decommissioning of three sites.

? Total Enabled Data Centres was 716 at the end of the quarter, an increase of 14, or 2% QoQ.

? Customers at the end of the quarter were 2,043, an increase of 63, or 3% QoQ

. ? Total Ports at the end of the quarter were 6,691, an increase of 358, or 6% QoQ

. ? Total VXCs at the end of the quarter were 10,741, an increase of 695, or 7% QoQ.

? Total MCRs at the end of the quarter were 382, an increase of 39, or 11% QoQ

. ? Total Services at the end of the quarter were 19,278, an increase of 1,133, or 6% QoQ

. ? Average Revenue per Port in December 2020 was $934, an increase of $21, or 2% QoQ.

? At the end of December 2020, the Company’s cash position was $144.8M.

 

View Attachment

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#Bear Case
stale
Added 7 months ago

One of the biggest risks to Megaport is that is won't reach scale fast enough.  By rapidly expanding its connected data centres, cloud onramp ports, and services it is hopefully going to get economies of scale, and the network effects associated with it....it makes sense for a customer to get on board.

There is a fine balance between growing its network and having cost blowouts.  According to a glassdoor review management are focused on becoming EBITDA positive so that is good reinforcement of managements statements.

Share Dilution is another issue.  It seems like once a year they pass the hat around to raise capital.  I think they won't have to do this again as the just did that around May 2020, December 2019 and so on.  

Other risks are that leasing costs, cloud costs etc could go up.... Cyber security is always a risk as well as government intervention.... Eg Governments could shutdown entire geographies....   

A competitor I feel I should mention is Hewlett Packard Enterprise... HPE.  They do offer cloud solutions similar to MP1, have a fantastic website, far broader product offering and is aligned heavily with Microsoft.  This could mean that Microsoft may naturally bump sales to HPE and vice versa.

The big cloud providers could offer a liquid bandwidth model, and to be honest I dont know whether they do already, which may make MP1 a less valuable proposition.

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#Bull Case
stale
Added 7 months ago

Megaport was founded by Bevan Slatterly who founded dickloads of other companies, wanted to create elastic internet connectivity to multiple cloud providers that could be scaled up and down as per the user needs, thus saving money for the customers, painpoints for their clients and addressing a need in the market.

https://www.megaport.com/investor/business-overview

Megaport has installed server equipment in about 390 data centres. These are connected to around 700 other data centres via leased fibre (mostly dark fibre), leased bandwith, and leased subsea cables. Megaport then operates its Software Defined Network (SDN) over those data centres connecting its customers to multiple cloud providers. 

This means Megaport is agnostic, allowing customers to scale their bandwidth up and down within seconds.  

Megaport is also self serve so there is no waiting around to be connected nor are locked in.

Megaport is almost at scale approaching EBITDA breakeven at the end of 2021.

Global Market Insights reckons that the Network-a-a-Service Market will have a 35% CAGR to 2025... The Global Cloud business is supposed to reach US$832 Billion by 2025.  This is a huge and growing market which Megaport is hopefully going to grow with, and catch more market share.

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#Business Model/Strategy
stale
Last edited 8 months ago

Updating from 6 months ago as my straw got stale.


Update 1: I noticed I got a downvote for this. It would be good for someone to put a bullish view and why one should invest in a loss making firm with single digit growth (see below)

Update 2: Only 7% growth in customers. 2% increase in Qtr revenue. MRR (monthly recurring revenue) increase of 2%.

Update 3: MUFG is now offering borrowed stock to short sellers.

Share price has stayed resilient against all odds despite not making money. I've constantly watched this and feel bad about missing this boat

However I have seen the product presented in a few cloud training videos and it is pretty slick.

Plus there is that stake from Digital Reality.

Apart from that I can't think of anything else as to why price continues to go up despite the bearish views.

Maybe some brokers did some DCF valuation which resulted in the shares being pumped?

Somehow they must be doing something right to keep the share price afloat.

 

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#ASX Announcements
stale
Added 10 months ago

Megaport executes on expansion plans and continues growth in customers and services with a solid FY20 performance, highlighted by revenue increasing 66% to $58.0 million. The Company also announced the development of Megaport Virtual Edge to transform edge networking.
 

I hold Megaport shares

View Attachment

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#ASX Announcements
stale
Added 10 months ago

Megaport Announces Development of Megaport Virtual Edge. Megaport-built Platform to Enable SD-WAN Capabilities Through Strategic Collaboration.

I hold Megaport Shares

View Attachment

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#ASX Announcements
stale
Added 11 months ago
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#Broker/Analyst Views
Last edited one year ago

23 July 2019:  The following link will take you to a research note from CG - Canaccord Genuity Capital Markets - who have just raised their PT (price target) for MP1 (Megaport) from $4 to $7, but seeing as MP1 are trading at over $7.50 today, it's little wonder CG have MP1 as a "hold" rather than a "buy".

https://canaccordgenuity.bluematrix.com/sellside/EmailDocViewer?encrypt=b254afd1-37d5-4bde-bf3b-5a2d79f72339&mime=pdf&co=Canaccordgenuity&id=Michelle.McAllister@asx.com.au&source=mail

 

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#Management
Last edited one year ago

Saturday 19-Jan-2019:  This is another company founded by Bevan Slattery.   He either founded or co-founded Pipe Networks (sold to TPG Telecom in 2010 for $373 million), NextDC (NXT), MP1 and Superloop (SLC).  He has sold out of NXT (and no longer has any involvement in that company), sold down his shareholding in MP1 to 22.34% in 2018, and also stepped back from the CEO role at SLC last March (he still holds 26.76% of SLC).  The following is a very interesting article about Megaport and Bevan Slattery:

http://www.afr.com/business/telecommunications/bevan-slattery-says-megaport-was-two-years-too-early-for-its-customers-20180613-h11cb9

I used to own shares in NXT, MP1 and SLC but have now sold them all, and all at good profits.  I became concerned about SLC in the first half of last year (2018) and I posted a straw about them at the time (under Superloop - SLC).  My main concerns were over key management leaving the company (head of Marketing, plus the founder of BigAIR, plus their CFO) and Slattery stepping back from the CEO position into a lesser role.  SLC (Superloop) went from $2.52 at the end of June 2018 to finish 2018 (December 31st) at $1.52, having bottomed out at $1.40 earlier in the month.  They closed the day yesterday (January 18th) at $1.48, and their chart is not pretty (unless you're short SLC). 

MP1 is holding up currently, but it doesn't look like one of the best opportunities in the market to me.  If you read the article (link above), you may understand why.  Slattery is a serial entrepreneur and has a happy knack of seemingly being in the right place at the right time - in terms of knowing what physical infrastructure would be required for the next generation of telecommunications (and computer data).  However, he's probably already shifted focus onto his next big idea.  I would argue that the best profits have already been made with MP1.  There is money to be made from following Slattery, but perhaps not if you hold on too long - as SLC has shown.  MP1's best days might be ahead of it, but then again...

See the source image

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See the source image

 

 

 

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#Baggy or Rulebreaking
stale
Added one year ago

A Baggy I may becomin'

But this stock is one I am in

I like the overall plan

Though the price is rather blan...d

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