Megaport's first quarter update was broadly in-line with Ord Minnett's expectations, and the broker retains its Sell rating and $15 target price.

Despite record monthly recurring revenue (MRR) over the quarter, the analyst points out sales momentum has normalised while costs appear to have ramped-up. The latter as part of Megaport's investment in the indirect sales channel and Megaport Virtual Edge (MVE). 

Ord Minnett feels it may take time to deliver incremental growth, and in the short term operating deleverage may occur as a result of the above-mentioned investments.

Sector: Software & Services.

Target price is $15.00.Current Price is $17.55. Difference: ($2.55) - (brackets indicate current price is over target). If MP1 meets the Ord Minnett target it will return approximately -17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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