The Catapult Group Ltd (ASX: CAT) share price has fallen 10% over the past two trading days to change hands for $1.44 this morning, despite the sports analytics business delivering no news to the market.
For the full year ending June 30 2017, Catapult posted a loss of $13.6 million on revenues of $60.8 million, with the loss more than doubling on the prior year's result of $5.9 million.
Revenue growth on a basis adjusting for two big new acquisitions also came in at 21%, although the share price has slumped 42% over 2017 as the company is not transitioning to profitability fast enough for impatient investors.
On September 5, sell-side broker and capital markets advisory business Bell Potter cut its recommendation on the business from "buy" to "hold" and reduced its valuation to $2.
In so doing Bell Potter maintained its revenue forecasts, but pared back its EBITDA forecast in FY 2018 to a $3.8 million loss mainly on the basis of rising operating expenses.
The broker also complained that the company failed to provide "any FY18 guidance at the release of its FY17 result last week and, while we did not expect any to be given, we did at least expect some broad targets or expectations to be provided such as whether statutory or underlying EBITDA is likely to be positive or negative".
The broker also noting that "underlying EBITDA" (excluding certain costs) may be positive in FY 2018 "but in the absence of any major acquisitions or an equity raising this year we believe statutory earnings should be the focus. We continue to forecast positive statutory EBITDA in FY19 and FY20 but have downgraded our forecasts by 20% and 14% due again to an increase in our opex forecasts".
Notably, Bell Potter has done fee-earning capital markets advisory work for Catapult in the past, but according to the Australian Financial Review was left "furious" after it was snubbed from more fee-earning capital raising work in favour of Goldman Sachs in July 2016.
The July 2016 offer to raise $100 million and fund an acquisition would have provided Bell Potter some juicy fees if it was offered the work, but post-snub it seems to have gone cold on Catapult and its management team's "lack of clarity" as to where EBITDA will land in FY 2018.
Bell Potter is now forecasting Catapult will post an EBITDA loss of $3.8 million in FY 2018, with positive EBITDA of $10.4 million and $19.6 million in FY 2019 or FY 2020 respectively.
However, given the history between Bell Potter and Catapult investors might want to take these new forecasts with a pinch of salt.
