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On Wednesday, JMP analysts maintained their Market Outperform rating and $40.00 price target for GDS Holdings (NASDAQ: NASDAQ:GDS), following the company’s release of its first-quarter 2025 earnings. The report highlighted a robust performance that suggests a rebound in China’s data center market. According to InvestingPro data, GDS has demonstrated impressive momentum with a 196% return over the past year, though the stock trades at a relatively high earnings multiple of -18.15x.
GDS Holdings’ recent financial outcomes have signaled a positive turnaround, coinciding with the Chinese government’s easing of restrictions on technology firms. This change is expected to sustain the market’s recovery. The data center provider experienced a slowdown over the past two years but is now set to expand its capacity significantly. The company plans to add approximately 900 megawatts (MW) of capacity in China and an additional 700 MW through its international branch, Day One, over the next four years. With a current market capitalization of $5.26 billion and revenue of $1.46 billion in the last twelve months, GDS maintains a solid current ratio of 1.47x despite operating with significant debt. Get detailed insights and 10+ additional ProTips with an InvestingPro subscription.
The JMP analysts’ evaluation of GDS Holdings reflects a belief in the company’s potential for growth, emphasizing the importance of considering its total available capacity when assessing its long-term value. The analysts’ price target of $40 implies a valuation of around 14 times the projected consolidated EBITDA for 2026.
GDS Holdings’ first-quarter performance and expansion plans have reinforced the analysts’ confidence in the stock’s future. The Market Outperform rating suggests that JMP expects the stock to outperform the average total return of the stocks in the analysts’ coverage universe over the next 12 to 18 months. The price target is based on the analysts’ financial models and represents their estimation of the stock’s fair value.
In other recent news, GDS Holdings has been the focus of several analyst reviews following its fourth-quarter 2024 earnings report. Notably, Raymond (NSE:RYMD) James upgraded GDS Holdings to a Strong Buy, setting a price target of $53.00, citing confidence in the company’s strategic shift beyond mainland China. Meanwhile, JMP Securities raised its price target to $40.00, maintaining a Market Outperform rating, emphasizing the company’s significant 152-megawatt order and progress toward a real estate investment trust (REIT) conversion. TD Cowen, while maintaining a Buy rating, adjusted its price target slightly down to $38.00 due to a shortfall in fourth-quarter results but recognized strong demand for hyperscale services in China. JPMorgan increased its price target to $34.00 but held a Neutral rating, highlighting GDS Holdings’ cautious approach amidst uncertainties in GPU supply and AI regulations. Nomura/Instinet initiated coverage with a Buy rating and a target of $35.80, optimistic about the company’s AI infrastructure potential and strategic direction. These recent developments underscore varied analyst perspectives on GDS Holdings as it navigates market challenges and opportunities in the data center industry.
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