NEXTDC is comparatively small compared to EQIX, with a market cap of just $8.3bn. It has demonstrated top line growth, but high levels of investment for future growth has led to net losses in recent periods. The company’s ongoing expansion and significant capital investments aim to position it for future profitability. Still, this uncertainty, along with new local investment thematic alternatives from HMC Capital and Goodman Group, is weighing on the stock.
We believe the risk-reward is looking very appealing in the $12-13 region after the stock’s correction. In September 2024, the company raised $750 million in equity and $2.9 billion in debt financing for expansion in the Asia-Pacific region, which is also likely to have satisfied buyers’ demand without further catalysts to drive the stock higher.
- We believe solid value is presenting itself for NXT below $13, but sentiment remains mixed: MM is long NXT in its Active Growth Portfolio.
MM is long and cautiously bullish towards NXT
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