What: Nearmap Ltd (ASX: NEA), a provider of geospatial mapping technology, has seen its share price soar 10.7% today to defy the market's general trend downwards. Now trading at 57 cents, the stock has risen an incredible 918% since the beginning of 2013 while it is still sitting 16% below its all-time high recorded at 68 cents in January.
So What: Given the enormous success Nearmap has enjoyed in the Australian market, today's news that the company is progressing with its expansion into the US market comes as a significant milestone. While such a move had been widely anticipated after the company announced it was conducting test flights across the region, today's news confirms that Nearmap's growth story could be on just the opening pages.
Nearmap will first target government and enterprise customers to generate immediate subscription revenue while small businesses and personal users will enjoy free access in the initial stages to drive adoption. As part of its 'US urban capture program', Nearmap will aim to capture 33% of the US population (more than 100 million people) within this financial year and up to 50% of the population (more than 150 million people) during FY16. By comparison, it currently captures 85% of Australia's population on a regular basis, which equates to just 20 million people.
Commenting on the launch, Managing Director Simon Crowther said: "After proving the viability of our subscription-based business model in Australia, we are now well placed to exploit our competitive advantage and embark on an international expansion program… Nearmap US will aspire to achieve sales of between $30M and $50M per year by December 2017."
Now What: Some investors will no doubt be deterred by the company's strong rally over the last two years, thinking they may have missed the boat on the big gains. However, with a very optimistic outlook for the coming years and a strong cash balance, Nearmap is in an excellent position to deliver market-smashing returns over the coming years.
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