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Results: Nearmap share price crashes 14.6% on FY19 report

Fast-growing Nearmap (ASX: NEA) saw its share price collapse today after the company released its 2019 full-year results.

Nearmap Ltd's share price fell as much as 14.6% today following the release of the company’s 2019 full-year report.

Though investors responded negatively to this release, the aerial imaging company continues to post strong growth figures while touting a highly scalable business model.

Nearmap FY19: results in focus

The broad strokes of Nearmap’s 2019 full-year performance was already mostly known to the market when the company reported its preliminary 2019 results last month.

Indeed, as we previously reported, the company’s share price collapsed some 15% in the wake of this release – after posting good, but evidently not good enough growth figures.

Here, Nearmap Ltd reported that the company saw its annual contract value (ACV) increase 36%, bringing the group’s total ACV to A$90.2 million.

In it’s full-year report, those ACV figures translated to FY19 revenues of A$77 million and group earnings (EBITDA) of A$15 million.

Speaking of these results, Nearmap’s CEO Dr Rob Newman further pointed out that the company:

‘Saw record growth in our subscription portfolio, delivered a suite of revolutionary new products, saw increasing traction in our North American business and expanded to Canada.’

Operating cash flow was also robust in the 2019 fiscal year, rising 81% to A$24 million.

Even with all this considered, the market seems to have responded just as negatively to the full FY19 annual report as it did to last month’s preliminary one.

In saying that, although Nearmap’s share price fell around 14.6% at the start of the day, the company’s shares have rebounded somewhat since then and currently trade close to A$2.81 per share.

2020 and beyond

A positive outlook couldn’t kickstart investor enthusiasm today.

Speaking of the company’s future outlook, Dr Rob Newman, Nearmap’s Managing Director and CEO, enthusiastically pointed out that:

‘Aerial imagery is a key component of the global location intelligence market, a large and growing market impacting many parts of business life.’

Reflecting on Nearmap’s future potential, Dr Newman stressed that 2020 represents a great opportunity for the company to accelerate its commercial presence.

Specifically, it was noted that Nearmap’s, ‘scalable, subscription business model, clear technology leadership and a world class team have put us in this strong position’ for future growth in 2020 and beyond.

The analyst take on Nearmap’s shares

Reflecting on the company’s small size, Nearmap (ASX: NEA) is only covered by six analysts, according to the Wall Street Journal.

Even still, the company has an overweight rating: with four analysts labelling Nearmap a buy and only two labelling it a hold.

It will be interesting to see if analysts revise their view of the aerial imaging company with the release of today’s 2019 full-year report.

A broader perspective

All up, since June 20, Nearmap Ltd (ASX: NEA) has seen its share price sold down heavily by growth-hungry investors – falling from a high of A$4.23 to A$2.78 today.

Ultimately, though the company has faced challenges in the short-term, investors should remember that year-to-date, Nearmap has performed spectacularly, rising 83% in that period.

The ASX 200, by comparison, has risen just 17% since January.


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