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On Thursday, JMP Securities analyst Greg Miller increased the price target for GDS Holdings (NASDAQ: NASDAQ:GDS), a leading developer and operator of high-performance data centers in China, from $35.00 to $40.00, while maintaining a Market Outperform rating on the stock. Currently trading at $30.61 with a market capitalization of approximately $6 billion, GDS has garnered strong analyst support with a consensus recommendation of 1.53 (Strong Buy) and price targets ranging from $7.33 to $62.95. The revision follows GDS Holdings’ fourth-quarter earnings for 2024, which highlighted a significant growth rebound in China, including the company’s largest-ever single order of 152 megawatts.
GDS Holdings’ recent earnings report not only showcased the company’s largest order but also indicated progress towards converting its Chinese business into a real estate investment trust (REIT) and preparing for an initial public offering (IPO) of its international business. These developments are seen as positive steps that could lead to a more robust performance reminiscent of the period before the Chinese government’s tech sector regulations were introduced earlier in the decade.
Despite some investor disappointment due to the 2025 guidance for the company’s China operations, the lack of detailed forecasts for its international markets, and the absence of an accelerated timeline for the international IPO, JMP Securities believes the core reasons for the Market Outperform rating remain intact. InvestingPro analysis reveals several key insights, including the company’s significant debt burden and high price volatility - just two of 12 exclusive ProTips available to subscribers. The analyst cites improving fundamentals and the increased probability of a successful international IPO as key factors for the price target adjustment.
The report from JMP Securities suggests that GDS Holdings is well-positioned to capitalize on the increasing demand in both its domestic and international markets throughout 2025. Based on InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. The analyst’s positive outlook is anchored on the company’s strategic initiatives and growth prospects in the data center industry. Discover comprehensive insights and access the detailed Pro Research Report, available exclusively to InvestingPro subscribers, covering this and 1,400+ other top US stocks.
In other recent news, GDS Holdings has seen a series of updates from various financial analysts. Raymond (NSE:RYMD) James upgraded GDS Holdings’ stock rating to Strong Buy, setting a price target of $53. This decision followed the company’s fourth-quarter results and a strategic shift in operations beyond mainland China, which the firm believes could lead to more stable growth. Jefferies also made adjustments, initially upgrading the stock to Buy with a $45 target, before later downgrading it back to Hold while maintaining the $45 target. This downgrade reflects a more cautious view despite the anticipated surge in AI-related capital expenditures in China.
Morgan Stanley (NYSE:MS) maintained its Overweight rating with a $39 price target, noting GDS’s private REIT deal valued at Rmb2.9 billion and its potential to reduce the company’s leverage. RBC Capital Markets, on the other hand, downgraded GDS Holdings from Outperform to Sector Perform, despite increasing the price target from $26 to $37. The firm cited the stock’s robust performance and its fair valuation as reasons for the downgrade.
These recent developments highlight the varied perspectives among analysts regarding GDS Holdings’ future prospects. While some see potential for growth due to strategic shifts and industry trends, others are more cautious, focusing on the current valuation and market conditions. Investors will likely keep a close watch on GDS Holdings as these assessments unfold.
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