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Nearmap share price down 30% in a month: where next?

As investors continue to sell-down the stock, we examine Nearmap’s first-half results, FY20 guidance and the view of one bullish broker.

Nearmap share price still under pressure

Though Nearmap’s (ASX: NEA) first-half results carried with it the following headline: 'uniquely positioned for global market opportunity,’ the fast-growing aerial imaging company proved to be one of the worst performing stocks on the Aussie market today, being bid down as much as 7.6% during the session.

The Nearmap share price finished out the session at the $1.83 mark.

Ultimately, this caps off a tumultuous month for the company: with its share price now down ~30% in the last 30 days.

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As part of Nearmap’s half-yearly results, the company reported Annualised Contract Values of $96.6 million – representing growth of 23% over the prior comparative period.

This translated to a 31% increase in statutory revenues – with these sales coming in at $46.3 million for the half. In the first-half of FY19, by comparison, Group revenues stood at $35.5 million.

Finally, the company also showed an increase in the Group Average Revenue Per Subscription (ARPS). Here, the company noted that Global Subscriptions increased 8% – to 10,081 overall – while the ARPS grew an impressive 14%.

In saying all this, it should be noted that NEA remains loss making, reporting a H1 statutory loss after tax of $18.6 million.

Regardless of all this and commenting on these results, Nearmap’s CEO, Dr Rob Newman said:

'Our investment into Sales & Marketing in North America was validated by a strong and improved performance from the North American core business.'

'While movements in larger contracts continue to disproportionality influence performance, as we continue to growth the repeatable, scalable core business in that region, our portfolio will become less impacted by these larger customers.'

The outlook: where next for Nearmap?

Nearmap’s CEO maintained that the company’s fundamentals and the opportunity at hand over the medium to long-term remains positive.

'Last month we revised guidance for our FY20 ACV Group portfolio to between $102m-$110m, and to continue to deliver ACV growth of 20-40% in the medium to long term,’ said Dr Rob Newman.

Excitingly, the company further said it would launch 'subscription-based artificial intelligence content’ in the second-half of FY20.

In response to today's results, the Royal Bank of Canada's Sydney Branch reiterated their Outperform rating on the stock as well as a lofty price target of $4.00 per share.

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