Why the Nearmap share price is charting higher today

Posted: 5 May 2021 1:02 pm

Shares in the aerial imagery company Nearmap have surged nearly 60% over the past year, underlining its growth potential.

Shares in Nearmap (ASX: NEA) have hit their highest level in 3 months with the stock surging more than 15% to $2.40 at the time of writing. Already, nearly 3 million shares have traded hands, surging past the stock’s 30-day average.

Why the Nearmap stock price is up

The Sydney-based location data company released a trading update on Tuesday afternoon.

Nearmap, which markets high-resolution aerial imagery for most of Australia, New Zealand and the United States, upgraded its annual contract value (ACV) guidance for FY21 to $128-$132 million, an improvement from the previous estimate of $120-$128 million.

It also expects net cash flow to be less than $10 million this financial year. Meanwhile, CEO Rob Newman says the development of the HyperCamera3 product is on track for the FY22 launch and expects to deliver 20-40% ACV growth from FY22 onwards.

Nearmap attributed the upgrade to the momentum seen in the first half continuing, with growth across its core industry verticals from both new and existing customers.

The technology provider says this reinforces the attractiveness of its subscription business model and will give it a significant competitive advantage.

Analyst Upgrades

Analysts seem to agree, and a spate of favourable commentary has followed the company’s announcement.

Morgan Stanley analysts said the continued US execution was a key feature, also noting that the upgrade had come even before the seasonal June peak, “implying confidence and de-risking the FY22e growth profile". They upgraded the 12-month price target to $3.20 a share and kept their "overweight" rating on the stock.

RBC Capital Markets analysts, who have a $3.10 price target and an "outperform" rating on the stock, said the cash flow numbers had been “better than expected”.

Before Wednesday’s surge, Nearmap shares were down 7% so far this year. But over the last 12 months, the stock is up nearly 60%. Investors will be hoping that momentum continues.

Considering buying Nearmap shares?

If you are keen to buy Nearmap shares, you should consider investing through an online share trading platform.

Choose from the dozens available for Australian investors. Compare the features and fees from the plethora of trading platforms available for Australian investors.

Make sure to select a platform that offers ASX-listed stocks as some trading platforms offer US stocks only.

Looking for a low-cost online broker to invest in the stock market? Compare share trading platforms to start investing in stocks and ETFs.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

Get more from Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site