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This stock is up 300% year to date

Talk about a skyrocket. Shares of Nearmap Limited (ASX: NEA) have shot up over 320% year to date versus a near 12% climb in the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO) over the same period. Simply click the chart below for a larger view.

Nearmap vs AXJO

Reason for meteoric rise

Here’s the skinny. The Sydney-based company, which provides high-res aerial imagery and “PhotoMaps”, launched a new website with a paywall in late 2012, and saw strong uptake in subscriptions.

In releasing the company’s half year 2013 results, managing director Simon Crowther said of the paywall: “This was a carefully thought out strategy to monetise nearmap’s content and build a sustainable, recurring revenue base for the business. The response since then has been very positive and reflects the value that organisations place on nearmap’s high quality, current and changing PhotoMaps.”

As Crowder went on to point out, the half year result only included one month of the new subscription sales. This was still enough to contribute to a 51% increase in revenue and reduce net losses after tax by 38%.

Looking forward, Crowder said: “Our customer base continues to grow and we are now seeing increasing demand coming from not only the lucrative government and commercial sectors, but also the SME market. Servicing this segment represents a significant opportunity for us to build scale, and broaden our customer base.”

Still too early to call

Today, Nearmap has nearly $6 million in cash and no debt. The company has an $86 million market cap. While it still seems too early to call — especially as the company is not yet profitable and Google could yet mount a more credible threat — Nearmap is a small cap to watch.

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More reading

Motley Fool contributor Catherine Baab-Muguira has no financial interest in any of the companies mentioned in this article. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

 

 

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