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Tuesday, Nebius Group shares are expected to draw attention following Northland’s initiation of coverage with an Outperform rating and a $34.00 price target. According to InvestingPro data, analyst targets for Nebius Group (NASDAQ:NBIS) range from $30 to $60, with the company currently commanding a market capitalization of $5.6 billion. Northland analysts project that Nebius Group will capture 1% of the AI as a Service (AIaaS) market share by the calendar year 2025, positioning the company to reach a 1.25% market share in the long term. The firm’s positive outlook is based on Nebius Group’s current capacity plans and financial forecasts.
Northland’s analysis suggests that Nebius Group’s strategic positioning and financial planning indicate a robust future for the company’s free cash flow (FCF) margins. The analysts anticipate that Nebius Group will achieve a 21% FCF margin. InvestingPro data reveals impressive revenue growth of 462% in the last twelve months, though the company remains unprofitable with negative EBITDA of $363.4 million. InvestingPro subscribers have access to 8 additional key insights about Nebius Group’s financial health and growth prospects. These margins are a significant factor in Northland’s 12-month price target for Nebius Group, which also corresponds to a 5.5 times enterprise value to calendar year 2026 revenue multiple.
The optimistic forecast for Nebius Group is rooted in detailed financial models and market share predictions. Northland’s Outperform rating indicates that the analysts expect Nebius Group’s stock performance to outpace the average return of the stocks the analysts cover. The $34.00 price target is derived from a discounted cash flow (DCF) analysis, a common valuation method used to estimate the value of an investment based on its expected future cash flows.
In their coverage initiation, Northland analysts highlighted key figures from their research. These figures, referenced as Figure 19, Figure 21, and Figure 25 in their report, outline the basis for their market share and financial margin projections for Nebius Group. The details of these figures were not disclosed but are central to Northland’s valuation model.
The coverage initiation by Northland is likely to be monitored by investors interested in Nebius Group’s growth trajectory and market performance. With the company’s focus on AIaaS—an increasingly competitive and innovative sector—Nebius Group’s progress towards the goals outlined by Northland will be closely watched. The company maintains strong financial flexibility with a current ratio of 9.6, and based on InvestingPro’s Fair Value analysis, the stock appears to be trading near its fair value. For deeper insights, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, which provides detailed analysis of Nebius Group among 1,400+ top US stocks.
In other recent news, Nebius Group reported its Q4 2024 earnings, revealing strategic growth plans in the AI infrastructure market. The company ended the year with $2.4 billion in cash, aided by a $700 million raise in the fourth quarter. Nebius projects an annualized run rate of $220 million by March 2025, with a target of $750 million to $1 billion by December 2025. In another development, Nebius announced the expansion of its U.S. cloud capacity with a new data center in New Jersey, expected to support up to 300 megawatts of capacity and to be completed by summer 2025. The company is also expanding its presence in Kansas City and Iceland, reflecting its commitment to environmental sustainability through the use of geothermal energy. Additionally, DA Davidson has maintained a Buy rating on Nebius Group with a $50 price target, citing the company’s strong position in the AI compute and neocloud sector. The firm noted Nebius’s diversified revenue stream as a key strength, potentially offering resilience against market demand fluctuations. Furthermore, Nebius will be among the first to provide the NVIDIA (NASDAQ:NVDA) Blackwell Ultra AI platform, enhancing its AI infrastructure capabilities.
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