The NextDC Ltd’s [ASX:NXT] share price fell today after the Australian data centre operator announced its full-year results for FY21.
At time of writing, the stock is currently trading hands at $12.88 per share, down 4.5%.
The cold reception to the results reflects a muted market reaction to NXT shares this year, with the data stock up 8% over the last 12 months, underperforming the ASX 200 by 14%.
How will today’s results set up the NXT share price for the months ahead?
Let’s examine the FY21 results to find out.
A temporary blip or a sign of things to come?
As of July last year, NextDC operates 11 facilities around Australia.
These data centres are designed to provide scalable, on-demand services for enterprises looking to outsource their data and cloud connectivity solutions.
There’s no doubt it’s an exciting space to be in.
The ‘big data’ trend is still flying high, and demand for services in this space are near-constant.
According to NextDC’s research, data centres will consume as much as a fifth of the world’s energy by 2025.
A first look at the company’s FY21 results would indicate all is going swimmingly.
Revenue has risen by 23% to $246.1 million.
But it’s possible investors were expecting even better results.
Although the revenue increased, it didn’t reach the peak of the upgraded guidance range ($251 million).
Also notable is the fact that the company ultimately made a net loss this financial year.
NXT’s loss after income tax reached $20.7 million. That said, this was an improvement on FY20’s net loss of $45 million.
These numbers, along with the negative sentiment across the market in general today, could be contributing to the company’s lagging share price.
There are other stocks on our radar right now…
Although some short-term investors may have hopped off the NextDC train for now, it appears that others are happy to stay in the stock for the longer term.
As it stands, I believe data stocks in general hold immense potential.
But there are plenty of other exciting opportunities to consider right now, particularly for those interested in getting into smaller companies…companies that the mainstream has probably overlooked.
Our leading small-cap stock market analyst Murray Dawes has found seven stocks on the ASX today he believes have enormous potential.
If he’s right — and he’s got an excellent track record — even just one of these stocks could yield huge gains down the track.
For Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here