NextDC is an ASX listed company which owns and operates data storage facilities for the technology industry. Uday Cheruvu, Portfolio Manager at PM CAPITAL, believes the company is misunderstood and that the market has been slow to come to grips with NextDC’s ‘non-linear’ earnings.
“The fact is that the data industry doesn’t work like that, the industry works on big contracts. These big contracts can come at lumpy times and once they come in they lock in for five years.”
NextDC is now cash flow positive and has recently raised capital to increase their capacity. Cheruvu says the company is well positioned to benefit from accelerating demand for data storage which is be driven by global companies such as Google, Amazon and Microsoft.
“We think the market is only now starting to learn the true earnings potential of this business.”
