A fresh, post-earnings price target raise helped propel Chinese data center operator Vnet (VNET 12.60%) to a double-digit gain on the stock market Friday. The company's American Depositary Shares (ADS) leaped nearly 14% higher on the move, crushing the 1.5% advance of the bellwether S&P 500 index.
One of the top Vnet bulls weighs in
Friday's raiser was Jefferies' Edison Lee, who increased his price target on Vnet's ADS to $25.13 apiece; formerly, he had placed a level of $24.23 on them. He maintained his buy recommendation on the equity as he did so.
Image source: Getty Images.
According to reports, with the move Lee is also maintaining Vnet as a top pick at his company. He acknowledged the company beat the broader analyst consensus estimates for both revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) growth in its second quarter.
The pundit wrote that although the company didn't snag major wholesale contracts during the quarter -- as entirely expected -- it is well positioned to do so in the remaining part of this year. Additionally, even without fresh contracts Vnet did extremely well with wholesale, as revenue growth from the segment ballooned by 81% year-over year.
Taking advantage of the trend
Any way it's dissected, Vnet's second quarter was impressive. It managed to grow overall net revenue by 22% to 2.43 billion yuan ($339 million), while its non-GAAP (adjusted) EBITDA swelled almost 28% to almost 733 million yuan ($102 million). With the relentless advance of artificial intelligence (AI), the better data center operators around the world are benefiting from expansion; Vnet is no exception.
