On Wednesday, Jefferies maintained a positive outlook on GDS Holdings (NASDAQ:GDS), a leading developer and operator of high-performance data centers in China. The firm raised the price target to $16.69 from $16.32, while reiterating a Buy rating on the stock.
The company reported its first-quarter results for 2024, showing a revenue and EBITDA increase of 9% and 5% year-over-year, respectively. These figures were slightly below the consensus and Jefferies' estimates. Despite this, GDS Holdings saw a substantial growth in its service area, which expanded by approximately 12%, as forecasted by Jefferies. Moreover, the net utilized and committed area additions during the quarter were deemed healthy.
GDS Holdings has decided to maintain its full-year 2024 guidance, signaling stability in its business outlook. However, the company's stock experienced a 16% decline, which the analyst attributed to profit-taking activities among investors.
InvestingPro Insights
Following Jefferies' optimistic perspective on GDS Holdings, the InvestingPro platform provides additional insights that can help investors further assess the company's financial health and market position. According to InvestingPro data, GDS Holdings has a market capitalization of $1.81 billion and is trading at a low Price / Book multiple of 0.69 as of the last twelve months ending Q4 2023. This could indicate the stock is undervalued relative to its book value, aligning with the notion that the company may have growth potential.
InvestingPro Tips highlight that GDS operates with a significant debt burden and is not expected to be profitable this year. However, the company has demonstrated a strong return over the last month with a 41.12% increase, and analysts at InvestingPro have determined a fair value of $13.74 for the stock, which is higher than the current trading price. For investors seeking a more comprehensive analysis, there are an additional 13 InvestingPro Tips available, which can be accessed on the platform. For those interested in deepening their research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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