The Nearmap Ltd (ASX: NEA) share price is less than 4% down from where it started the year, and the company is forecasting strong growth.
The post Nearmap (ASX:NEA) targets return of 20-40% year-on-year growth appeared first on Motley Fool Australia. –
The Nearmap Ltd (ASX: NEA) share price is less than 4% down from where it started the year. And if the company can achieve its forecast of a return to 20-40% year-on-year growth, shares could well trend higher.
Nearmap had a good start to the trading day this morning, with the share price up 0.4% in early morning. That came as the wider S&P/ASX 200 Index (ASX: XJO) posted a 1.2% gain in the first 20 minutes of trading.
Since then, as you likely know, the ASX has been shuttered due to an as yet unexplained market outage.
What does Nearmap do?
Nearmap was founded in 1998 in Perth, Western Australia. The company provides high resolution aerial imagery technology and location data for companies and government customers across Australia, the United States, Canada and New Zealand. Its technology allows customers to conduct detailed virtual site visits rather than needing to fly to and over the locations in person.
Nearmap shares first traded on the ASX in 2000.
How remote work is helping the Nearmap share price
While many businesses continue to struggle with government COVID-19 mitigation measures, Nearmap’s business model has proven more resilient.
At the company’s annual general meeting last week, Nearmap revealed strong growth in its annualised contract value (ACV).
In the US and Canada, which form a large part of the company’s growth ambitions, ACV increased 27% in FY20. ACV also grew in Australia and New Zealand, up 11%.
Building on this positive momentum, Nearmap forecast ACV of $120 million to $128 million in FY21. Over the medium to longer term, Nearmap is forecasting ACV growth in the range of 20% to 40%.
Addressing the company’s relative resilience in the face of the pandemic, Nearmap chief executive Rob Newman told the Australian Financial Review (AFR):
Some (customers) have been negatively affected, but others are relying on us more and our business is very resilient in this time…
People still need to insure homes, local governments still have to provide services and people’s roofs still need to be fixed… The capital raise in September is setting us up to accelerate growth and we see fiscal 21 as the way to build the foundation to scale rapidly.
We’re seeing this year as a foundational year to return to 20 per cent to 40 per cent year-on-year growth.
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Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.