GDS Holdings (NASDAQ:GDS) maintained its positive outlook in the eyes of TD Cowen, as the firm reiterated its Buy rating and a steady price target of $27.00. The endorsement comes after GDS reported favorable second-quarter results for 2024, confirming its guidance for the year. The company also announced robust new leasing activity, primarily attributed to the performance of GDS Infrastructure (GDSI).
Management at GDS Holdings has reaffirmed the strategic objectives for both GDS Holdings and GDS Infrastructure, signaling confidence in their operational direction.
The demand strength observed in GDS Infrastructure is particularly noteworthy, with the firm's performance exceeding expectations. This has been a key factor in TD Cowen's continued long-term positive stance on GDS Holdings. The analyst from TD Cowen highlighted the encouraging signs of artificial intelligence development in China, which further supports the firm's optimistic view of GDS's future prospects.
GDS's commitment to maintaining its guidance for 2024 and the strategic plans set forth for its subsidiaries underscore the company's stability and potential for growth.
GDS Holdings Limited reported better-than-expected second-quarter results, with a narrower loss and a revenue beat. The company posted a net loss of RMB231.8 million or RMB1.30 per share, less than analysts' estimates of a RMB1.82 per share loss. Revenue rose 14.3% YoY to RMB2.83 billion, surpassing the consensus forecast of RMB2.79 billion.
Significant growth was also seen in GDS Holdings' international business, with revenue surging 690.2% YoY to RMB255.5 million. Major new customer orders were secured in Johor, Malaysia, reflecting strong regional demand. For the full year 2024, GDS reaffirmed its guidance for total revenues of RMB11,340-11,760 million and adjusted EBITDA of RMB4,950-5,150 million.
InvestingPro Insights
Following the positive reinforcement from TD Cowen, GDS Holdings (NASDAQ:GDS) continues to exhibit signs of both opportunity and caution in the market. With a significant 25.72% return over the last week and a staggering 84.27% over the last three months, the company's stock performance has been noteworthy. The InvestingPro Tips indicate that GDS is a prominent player in the IT Services industry, which aligns with the analyst's view on the company's potential to capitalize on AI developments in China. However, it's important to note that analysts do not anticipate the company will be profitable this year, and it has been operating with a significant debt burden.
The real-time data from InvestingPro shows a market capitalization of $2.87 billion, and a concerning P/E ratio of -3.92, reflecting the company's current lack of profitability. The revenue growth for the last twelve months as of Q1 2024 stands at 7.21%, indicating a steady increase. Nevertheless, the company is trading near its 52-week high, at 93.65% of that peak, which may suggest caution for potential investors considering the entry point.
For those looking to delve deeper into GDS's financials and future outlook, InvestingPro offers additional tips that could shed light on the company's valuation and performance metrics. In total, there are 15 more InvestingPro Tips available that could provide investors with a more comprehensive understanding of GDS Holdings' investment profile.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.