Nearmap share price falters following record quarter

Nearmap shares fall mute on another milestone.

| More on:
A man looks at a map, totally confused.

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

Key points

  • The Nearmap share price is trading 0.72% lower this morning
  • Investors have opted to sell despite the company achieving a record annual contract value in North America
  • The company reaffirmed its guidance for the upper end of $150 million to $160 million in ACV at the end of FY22

The Nearmap Ltd (ASX: NEA) share price is slipping after revealing record results in the third quarter.

In the early hours of trading, shares in the aerial imagery technology company are down 0.72% to $1.38. As a result, the Nearmap share price is now 29% above its 52-week low of $1.065.

North America provides strong growth

Today's announcement is giving shareholders of the mapping company something to rave about. According to the release, the third quarter of FY22 has proven to be lucrative for Nearmap — specifically, the North America government sector.

In dollar terms, Nearmap generated US$2 million in incremental annual contract value (ACV) from the North America government sector. This was spread across customers located in 31 US states and two provinces in Canada, indicating a widespread base.

Furthermore, the ASX-listed company informed shareholders that its technology is now being used in 42 of the 50 US states where it is offered. However, the Nearmap share price has failed to gain traction today amid the news.

Importantly, the record quarter builds upon previous milestones in the North America region. In December 2021, Nearmap announced that its ACV in the US had hurtled past US$50 million. This marked the eclipse of Australian and New Zealand ACV for the first time.

Management commentary

Accompanying the update were comments from managing director and CEO Dr Rob Newman:

Nearmap is attracting new business in North America at a record pace. With momentum already strong across our core verticals, the ability to exceed our target for the government sector in Q3 FY22 by adding more than $2 million in incremental annual contract value shows the underlying strength of our business and proposition.

Positively, the company has also reaffirmed its expectation for ACV to be towards the upper bound of $150 million to $160 million by the end of FY22. This would be in comparison to Nearmap's $128.2 million in ACV at the end of FY21.

Nearmap share price snapshot

Firstly, the technology sector as a whole has performed poorly from the outset of 2022. For instance, the S&P/ASX All Technology Index (ASX: XTX) is down nearly 20% year to date.

Fortunately, the pain is not as severe for the Nearmap share price. Since the beginning of the year, shares in the company have fallen nearly 10%.

Currently, the aerial imaging business is valued at approximately 5.5 times price-to-sales. ASX-listed Nearmap remains unprofitable on the bottom line.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Nearmap Ltd. The Motley Fool Australia owns and has recommended Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Man holding a calculator with Australian dollar notes, symbolising dividends.
Technology Shares

$10,000 invested in DroneShield shares 5 years ago is now worth…

You might be laughing all the way to the bank if you had done this.

Read more »

Happy woman working on a laptop.
Technology Shares

Up 60% since April, why this $40 billion ASX 200 tech stock remains a 'compelling buy' today

A leading expert believes this $40 billion ASX 200 tech stock has a lengthy growth runway ahead of it yet.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Technology Shares

DroneShield shares sink 7% despite big news

Let's see what's going on with this market darling on Thursday.

Read more »

A man activates an arrow shooting up into a cloud sign on his iPad.
Technology Shares

Up 25% since April, is it too late to buy Xero shares today?

A leading expert gives his verdict on the growth outlook for Xero shares.

Read more »

Man looking at digital holograms of graphs, charts, and data.
Technology Shares

2 amazing ASX tech shares I wish I'd bought last year

These tech companies are among the world’s best companies.

Read more »

A man in a business suit and tie places three wooden blocks with the numbers 1, 2, and 3 on them on top of each other.
Broker Notes

3 reasons to buy this booming ASX All Ords tech stock today

A leading broker forecasts more gains to come from this surging ASX All Ords tech stock.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Hologram of a man next to a human robot, symbolising artificial intelligence.
AI Stocks

Why Macquarie forecasts a big rebound for these 2 quality ASX All Ords tech stocks

Macquarie expects a big rebound is coming for these AI linked, ASX All Ords tech stocks.

Read more »