You may have seen Nearmap Ltd (ASX: NEA) shares were among the market's most explosive performers during Tuesday's session on the ASX.
They rose an astonishing 28.9%, closing at a high price of 91.5 cents. That's almost triple their 52-week low of just 32.5 cents – struck in February this year – with the vast majority of that share price appreciation coming since late in June. Its shares have given back almost 5% today, although they still trade on an 87 cent price tag.
Nearmap is a relatively small business that provides aerial imaging technology in both Australia and the United States. These services are provided to a wide range of customers spanning various industries, such as architecture and engineering, construction, insurance, rail, property and roofing, as well as government sectors.
An announcement from Nearmap to the market yesterday acted as the catalyst for the impressive rally. Updating the market on its activity for the first quarter of financial year 2017 (FY17) it said it had enjoyed the largest US sales quarter to date (it now has over 400 customers in that country). It also experienced continued growth in the Australian business, while adding TomTom to its customer base in the United States to complement its subscription in Australia.
Here's the chart that created so much hype among investors on Tuesday:
Although Nearmap is creating exctiment in its market, investors do need to be cautious. Nearmap is still a somewhat risky investment proposition, although yesterday's results were certainly encouraging for shareholders.
