The Vocus Group Ltd (ASX: VOC) share price has been an impressive performer over the last two and a half months.
Since the specialist fibre and network solutions provider's shares fell to a 52-week low of $1.80 in late March, they have rallied a massive 73% to trade at $3.13 today.
Is it too late to buy Vocus shares?
The Vocus share price can still go a lot higher from here according to one leading broker.
A note out of Goldman Sachs this morning reveals that its analysts have reiterated their buy rating and $3.85 price target on the company's shares.
This price target implies potential upside of 23% for its shares over the next 12 months.
Why is Goldman Sachs bullish?
According to the note, the broker was pleased to see Vocus reiterate its FY 2020 guidance and announce the refinancing of its debt on Thursday.
Vocus revealed that it expects its FY 2020 earnings before interest, tax, depreciation, and amortisation (EBITDA) to be in the range of $359 million to $369 million.
This compares to the EBITDA of $356 million that Goldman was expecting. It believes this is reflective of the resilience of telecom earnings.
Overall, the broker remains positive on its outlook and also on its valuation in comparison to rival TPG Telecom Ltd (ASX: TPM).
Goldman commented: "We stay Buy on Vocus with this update removing two key investor issues (i.e. refinancing & lack of guidance commentary) and helping to de-risk our positive investment view."
"This is based on: (1) improving Enterprise earnings outlook, with a meaningful opportunity to partner with NBN Co.; (2) favorable valuation (vs. TPM and history); (3) significant infrastructure asset base, which we see as attractive in a low-rate environment," it concluded.
Should you buy Vocus shares?
While my preference in the telco space remains Telstra Corporation Ltd (ASX: TLS), I think Vocus is a great option as well.
Times have been hard for the company over the last few years, but it finally appears to be on track now to deliver solid growth over the coming years. This could lead to the Vocus share price outperforming over the medium term.
