Too Soon to Celebrate a Turnaround for Megaport

We expect Megaport's strategy in the near term will revolve around navigating significant pricing mistakes it made in early 2023, which have put its products in an uncompetitive position. Our assessment of Megaport's products are that they are commodities, leaving price as the key deciding variable. Given recent price hikes made its products too expensive, compared with alternatives, the company now finds itself in a position where it either needs to revert recent prices hikes, which would lower revenue again while still leaving existing customers aggravated over the memory of the price hike, expend significantly more resources to sell its overpriced products or hope for competitors to raise prices as well.