The Catapult Group International Ltd (ASX: CAT) share price surged as much as 15% during yesterday's trade despite no company-specific news being released to the market.
Why did the Catapult share price surge higher?
It's unusual to see these kinds of share price movements without a big ASX announcement as the Catapult share price briefly breached the $1 per share mark before closing 8.8% higher at $0.99 per share.
The company's share price has reached its highest point since the start of the year and my best guess is that investors are looking to buy Catapult on the cheap in anticipation of strong quarterly and full-year earnings.
The sports analytics and wearable technology company announced annual recurring revenue (ARR) of $57.4 million in February, up 25% on last year's numbers, as it continues to see strong revenue subscription growth and sustained margins.
The company's Elite Wearables segment saw ARR climb 32% on prior corresponding period while its Elite Video segment grew ARR by 18% and revenue by 22% to $20.7 million at the half.
Catapult's share price has fallen 17.5% in the last 12 months after several notable setbacks including the surprise resignation of its CEO earlier this year.
Given the company's valuation recently hit its lowest level since its post-IPO days in March 2015, it looks to me like investors are buying up on a relative value basis against Aussie tech peers including Altium Ltd (ASX: ALU) and Appen Ltd (ASX: APX).
I think Catapult has long-term growth potential, but the stock is still a little too volatile at the moment for my liking and I think there are better options in the Information Technology sector such as Afterpay Touch Group Ltd (ASX: APT).
For those who are similarly bearish on Catapult, this top-rated stock in a booming industry could a handy portfolio pickup to unlock some serious capital gains in 2019.
