Nearmap’s shares were on fire in February after a stronger than expected update…
The post How did the Nearmap (ASX:NEA) share price respond last earnings season? appeared first on The Motley Fool Australia. –
The Nearmap Ltd (ASX: NEA) share price has been a positive performer over the last three months.
Since this time in May, the aerial imagery technology and location data company’s shares have risen 27%.
This may have been driven by hopes that a strong full year result this week could give the Nearmap share price a boost.
How did the Nearmap share price respond last earnings season?
The Nearmap share price rocketed higher following the release of its half year results in February. Investors were buying the company’s shares after it proved short sellers wrong by delivering strong growth in its North American business.
At the end of the first half, Nearmap’s total annual contract value (ACV) stood at $112.2 million on a reported basis and $116.7 million on a constant currency basis. This was up 16.1% and 21%, respectively, over the prior corresponding period.
This was driven largely by its North American business, which reported ACV growth of 21.9% since the end of June to US$35.1 million.
Also getting investors excited was its operating leverage. It boosted Nearmap’s margins and underpinned strong operating earnings growth. For example, earnings before interest, tax, depreciation and amortisation (EBITDA) increased 322% to $13.5 million.
Things weren’t quite as positive on the bottom line, with the company posting a statutory loss after tax of $9.4 million. Though, this was an improvement from an $18.6 million loss a year earlier.
Furthermore, Nearmap has the balance sheet strength to absorb this loss. It ended the period with a cash balance of $129.3 million.
What’s next for Nearmap?
Last month Nearmap provided an update and revealed that it expects to reported ACV of $133.8 million for FY 2021 in constant currency terms. This compares to its upgraded guidance of $128 million to $132 million. Once again, management advised that this was driven by its North American business. This went down well with investors, leading to another jump in the Nearmap share price.
So with its result already largely pre-released, one thing that could move the Nearmap share price this earnings season will be its guidance for FY 2022.
Nearmap has a long term ACV annual growth target of 20% to 40%. Anything towards the top end of that range would be likely to give the Nearmap share price a boost.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.