The Nearmap Ltd (ASX: NEA) share price has failed to follow the market higher today and is dropping lower.
At the time of writing the aerial imagery technology and location data company's shares are down 1.5% to $2.22.
This means the Nearmap share price is now down 28% since the start of the month.
Why is the Nearmap share price down 28% in September?
As well as coming under pressure from the tech selloff this month, investors have been selling Nearmap's shares after the launch of a capital raising in the middle of the month.
Nearmap launched a fully underwritten institutional placement to raise $72.1 million and a non-underwritten share purchase plan which is aiming to raise a further $20 million. The institutional placement was completed at a 4.2% discount of $2.77.
While these funds are being raised to support its growth plans, I suspect some investors were caught by surprise by the capital raising. Especially after the company worked so hard to become cash flow positive in FY 2020. This appeared to be an indication that further dilutive capital raisings wouldn't be necessary.
Should you buy the dip?
One positive from this disappointing share price decline is that it has brought Nearmap's shares down to an attractive level.
I'm not the only one that thinks this is the case. Earlier this month analysts at Citi put a buy rating and $3.15 price target on the company's shares. This price target implies potential upside of 42% over the next 12 months.
Citi believes Nearmap's transition to an insights and analytics provider is a good move and appears confident in its growth trajectory.
Elsewhere, Morgan Stanley is also positive and has an overweight rating and $3.00 price target and Goldman Sachs has a neutral rating and $2.95 price target.
The general consensus, therefore, is upwards from here for the Nearmap share price.
