Why the Catapult (ASX:CAT) share price is racing 12% higher today

The Catapult Group International Ltd (ASX:CAT) share price is surging higher on Monday after the release of a positive business update…

| More on:
catapult share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Catapult Group International Ltd (ASX: CAT) share price is racing higher on Monday following the release of a business update.

In afternoon trade, the sports analytics and wearables company's shares are up 12% to $1.97.

What was in Catapult's business update?

This afternoon Catapult released an update on how it has been performing so far in FY 2021.

According to the release, as of 9 November, the company's cash balance had strengthened further, rising to US$24 million (excluding drawn loans). This is an increase of US$10.1 million from the end of the previous financial year, which is a big positive given its history of cash burn in the past.

Management advised that the increase in its cash flow has been driven by strong cash collections, and ongoing cost savings associated with COVID-19.

This has been underpinned by sports teams across numerous codes continuing to heavily utilise Catapult solutions during return-to-play programs and in competition. It notes that customer usage of its cloud-based SaaS solutions are higher than the previous year across all individual regions.

And while new business opportunities remain challenged in the current environment, Catapult is utilising its strong cash position and positive cash flow to convert new opportunities and other capital sales to full SaaS subscription-based deals. Going forward, it expects a significant shift from capital to subscription for Performance & Health sales.

Catapult CEO, Will Lopes, commented: "The continued strength of Catapult's financial position is testament to the resilience and quality of our SaaS business model. This position of strength has enabled us to repay debt and maintain a healthy cash balance."

The chief executive also revealed that churn levels remain low and subscription renewals are strong.

"Our focus on creating value for our customers with enhanced and innovative new solutions in a COVID environment has driven usage of our solutions to record levels. Although there is short-term pressure on the sport from COVID, our churn remains low and subscription renewals strong. While the signing of new business remains a challenge this year, COVID has not impacted the long term growth potential of the business," he concluded.

Should you invest $1,000 in Brainchip Holdings Limited right now?

Before you buy Brainchip Holdings Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Brainchip Holdings Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Catapult Group International Ltd. The Motley Fool Australia has recommended Catapult Group International 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.

More on Share Gainers

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another tough day for investors this Tuesday.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Dimerix, Evolution Mining, Inghams, and NextDC shares are charging higher today

These shares are rising when many are falling today. But why?

Read more »

A neon sign says 'Top Ten'.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough trading day for ASX stocks this Monday.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why 4DMedical, Gold Road, Syrah, and Tyro shares are racing higher today

These shares are starting the week strongly. But why?

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

2 ASX gold stocks racing higher in Monday's sinking market

Investors are sending these ASX gold stocks flying higher on Monday. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords share just rocketed 19% on BIG news

Investors are sending this ASX All Ords share flying on Monday. But why?

Read more »

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »