In late morning trade the Nextdc Ltd (ASX: NXT) share price has edged higher and is within a whisker of its all-time high following the release of its annual general meeting presentation.
At time of writing the data centre operator's shares are up 0.5% to $5.44.
What's new?
As well as providing a breakdown on its FY 2017 activities, management provided the market with an update on its progress so far in FY 2018.
Pleasingly, management revealed that the company has made a strong start to the new financial year. This has given it confidence to believe that the company will deliver on the FY 2018 guidance provided at its full-year results in August.
According to the release, revenues are expected in the range of $146 million to $154 million. This will be an increase of 18% to 25% on the $123.6 million achieved in FY 2017.
EBITDA is forecast to increase from $49 million in FY 2017 to between $56 million and $61 million in FY 2018. While this represents growth of just 14% to 25%, this is largely down to higher operating costs due to investments made in its new data centres.
I expect to see earnings growth accelerate greatly in FY 2019 when the company begins to benefit from the additional capacity that these investments provide.
Should you invest?
I continue to believe that NEXTDC is one of the best buy and hold investment options on the share market today.
It may not be cheap, but I remain confident that demand for its services is growing at such a strong rate due to the rise of cloud computing that it will generate more than sufficient earnings growth in the long-term to justify the premium.
After all, the world's top cloud-services companies, enterprises, and government agencies are amongst its 772 customers today. These include Google and Amazon to name just two.
All in all, I feel NEXTDC would be a quality addition to most portfolios today along with fellow tech shares XERO FPO NZX (ASX: XRO) and PUSHPAY FPO NZX (ASX: PPH).
