A significant price-target raise from an analyst led to significant gains for GDS Holdings' (NASDAQ: GDS) U.S. listed stock on Monday. The Chinese data center company saw its American depositary shares (ADS) rise by an even 10% on the day as a result. That percentage was nearly 10 times the gain of the S&P 500 index, which closed just short of 1% higher.
A massive lift
Well before market open that day, Jefferies prognosticator Edison Lee made quite the dramatic change to his fair value assessment of GDS. While maintaining a buy recommendation on the specialty tech stock, he cranked his price target well higher. It's now at $25.05 per ADS from the previous $16.69.
It was not immediately apparent why Lee changed his price target.
Interestingly, the move came less than two days away from the company's latest scheduled earnings release. Collectively, the Jefferies pundit and his peers who follow the company's stock are modeling a deeper net loss for the second quarter (the equivalent of $0.26 per share versus $0.17 for the same period of 2023). On the other hand, they believe the specialty tech company will manage to lift its revenue by 15% year over year to nearly $390 million.
Fresh quarterly results on tap
GDS will unveil its results and host a conference call to discuss them before the opening of the U.S. market on Wednesday. Shareholders will not be hoping for a repeat of the first-quarter performance, as the company fell short of the consensus analyst estimates for net loss. It did, however, meet expectations for revenue for the period.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool has a disclosure policy.
