This report is an updated version of the report published on 6 January 2025 at 1:11 PM AEDT.

Macquarie Technology Group Limited (ASX: MAQ)  

MAQ is an Australian data centre, cloud, cyber security, and telecom service provider. The ASX-listed company caters to mid-to-large business and government customers. 

Recommendation Rationale - SELL at AUD 89.18

• Facing Resistance: The stock has crossed its Resistance 1 level and is approaching Resistance 2 level. However, its 14-day Relative Strength Index (RSI) is showing a reading of ~59.52, which indicates the stock is approaching overbought zone.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (Price/Earnings, EV/EBITDA, EV/Sales and Price/Book Value) are higher than the median of the Software & IT Services Sector.
• Increased Debt: As of 30 June 2024, MAQ's total current liabilities stood at AUD 85.07mn, compared to AUD 63.07mn as on 30 June 2023.
• Infrastructure and Capacity Risks: Data centre operations are capital-intensive, requiring significant upfront and ongoing investment in infrastructure. Meanwhile, overcapacity or underutilisation of data centres could impact profitability.

MAQ Daily Chart

Valuation Methodology: EV/Sales Approach (FY Jun'25E) (Illustrative)

MAQ is expected to trade at a slight premium compared to its peers considering the acquisition of Macquarie Park, expected EBITDA growth in FY25, IC3 SuperWest project update and projected growth capex in FY25. For conducting valuation, the following peers have been considered: Megaport Ltd (ASX: MP1), Wrkr Ltd (ASX: WRK), NEXTDC Ltd (ASX: NXT), and others.

Considering that the stock is approaching overbought zone, market uncertainties, and risks associated, the share price can witness some correction at the current levels before moving higher. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 89.18, as of 6 January 2025 at 12:55 PM, AEDT.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 6 January 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.