Bank of America Securities analyst Daley Li reiterated a Buy rating on GDS Holdings (GDS – Research Report) today and set a price target of $10.40.
Daley Li has given his Buy rating due to a combination of factors that underscore GDS Holdings’ solid financial performance and promising growth prospects. GDS Holdings reported fourth-quarter 2023 results that aligned with management’s expectations, demonstrating a steady year-over-year revenue and adjusted EBITDA growth. Moreover, the company’s forward-looking guidance for fiscal year 2024 forecasts even stronger revenue and adjusted EBITDA growth, with revenue projections modestly exceeding consensus estimates. The Buy rating is further supported by the recent successful equity raise for GDS Holdings’ international business, which is expected to act as a key driver of future growth.
Li’s optimism is also based on the strategic initiatives that GDS Holdings is undertaking, particularly its international expansion, which is ramping up quickly and is backed by significant investor support. This expansion is anticipated to contribute substantially to the company’s overall revenue. Additionally, in China, GDS Holdings is focusing on maintaining steady EBITDA growth and reducing leverage, with a target net debt to adjusted EBITDA ratio below 5 times. The company’s cautious but targeted approach to expansion in its domestic market, coupled with the accelerated growth of its international business, provides a strong rationale for the Buy rating and the positive outlook on the stock.
Li covers the Technology sector, focusing on stocks such as GDS Holdings, VNET Group, Inc. Sponsored ADR, and Agora. According to TipRanks, Li has an average return of -18.2% and a 0.00% success rate on recommended stocks.
In another report released on March 12, Citi also maintained a Buy rating on the stock with a $28.00 price target.
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GDS Holdings (GDS) Company Description:
GDS Holdings Ltd. develops and operates data centers in China. Its facilities are strategically located in China’s primary economic hubs where demand for high-performance data center services is concentrated. The company’s data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancy across all critical systems. It is carrier and cloud-neutral, which enables customers to connect to all major PRC telecommunications carriers, and to access a number of the largest PRC cloud service providers. The company also offers colocation and managed services, which include direct private connection to major public cloud platforms. GDS Holdings was founded by William Wei Huang in 2001 and is headquartered in Pudong, China.
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