The Catapult Group International Ltd (ASX: CAT) share price finished the day 0.5% lower at $1.74 on Wednesday following the release of its annual general meeting presentation.
This extended the sport analytics and wearables company's year-to-date decline to almost 30%.
Why are its shares lower?
It appears as though investors are a touch disappointed with the company's full-year guidance.
For the full-year management expects group revenue of between $76 million and $81 million. This represents growth of 17% to 25% on FY 2017's pro forma revenue. This is expected to be driven by strong demand for its elite wearables and is based on an AUD/USD exchange rate of 77 U.S. cents.
A further disappointment may be the planned launch date of its prosumer products. These are not expected to be launched until the fourth-quarter of FY 2018 at the earliest.
The highly anticipated launch of Catapult-branded prosumer products could be a key driver of growth in the future and investors may have been optimistic of an earlier launch to boost its top line.
Management is going after the soccer market initially and it isn't hard to see why. With 270 million soccer players worldwide, there certainly is a huge market opportunity for its prosumer segment. Management believes its initial target market consists of 3 million players, which equates to 7% of the 17 million FIFA-registered soccer players.
Should you invest?
While I think that Catapult is one of the more exciting tech shares on the local share market, I'm not a buyer of its shares just yet for valuation reasons and its balance sheet.
At this stage I think the company should just about be able to get by without another capital raising, but if things don't go to plan then there is a danger that it may need to seek further funding.
This could potentially weigh heavily on its shares over the coming quarters. In light of this, I see more value in tech shares such as Altium Limited (ASX: ALU) and PUSHPAY FPO NZX (ASX: PPH).
