Megaport shares (ASX: MP1) pushed higher today, adding 6.28% on what was a difficult day for Aussie markets, with the blue-chip ASX 200 pulling back 0.79%. Today’s move pushed MP1 back above A$14 and comes having seen the stock correct 10% from the rally, before seeing buyers step in.
This can be a healthy sign in moves such as have been taking effect at Megaport this year, with gains of 89% since the turn of 2025. The chart below shows clear tests of resistance becoming support around A$12, and the pullback to test strength at A$13.
One of the key metrics investors are closely watching is Megaport’s valuation. The company’s trailing twelve-month (TTM) Price-to-Earnings (PE) ratio stands at a lofty 348, suggesting a high valuation relative to current earnings. However, the forward PE ratio is 3x lower, reflecting expectations for continued earnings growth. This disparity between the TTM and forward PE ratios underscores the market’s belief that Megaport has significant growth potential. However, this expectation sets a high bar for the company to clear in upcoming earnings reports.
Analysts have noted the company’s high Price-to-Sales (P/S) ratio, which, in May, stood at 9x, significantly higher than the industry average. Concerns have been raised that this elevated P/S ratio may not be sustainable without accelerated revenue growth. Furthermore, Megaport’s shares have been susceptible to broader market influences, declining amid sell-offs in technology stocks due to concerns over potential economic recessions and anticipated interest rate hikes.
The average price target of A$12.13 has not kept pace with recent price action, although with earnings around 1 month away, and a new set of financials to digest, shifts in outlook can go either way.
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As Megaport prepares to release its next earnings report, markets will be closely watching the usual performance metrics, yet the commentary and outlook for the future is likely to hold sway over the next move.
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