Is Nearmap Ltd really worth 90c per share?

Nearmap Ltd (ASX: NEA) shareholders have been gifted an upbeat outlook for their investment with analysts at Bell Potter securities giving the stock a 90 cent price target, representing a further 23% upside from today’s 73 cent price tag.

That target is nothing short of remarkable considering the stock has already climbed 68% since mid-August, and a phenomenal 1,638% since its inception into the ASX in late 2012.

Even more amazingly, I believe the stock could climb much higher than Bell Potter’s target over the coming years. The provider of geospatial mapping technology has already made a big name for itself in the Australian market and looks set to do the same in the U.S. As part of its “urban catcher” initiative, the company has estimated it could capture up to 33% of the US population this financial year, with that number set to increase to 50% in FY16.

Nearmap recorded its first annual profit last financial year where it managed to generate profit after tax of $7.1 million, compared to a loss of $1 million in the previous year. As reported by The Australian Financial Review, Bell Potter estimates that the company can grow its earnings at a compounded rate of more than 60% between FY15 and FY17, which would more than justify its rather lofty valuation.

While I already own shares in this small cap superstar, I would certainly consider buying more shares at today's price. Another company I would love to add to my holdings has just been named as The Motley Fool's #1 Stock Pick for 2015.

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Motley Fool contributor Ryan Newman owns shares in Nearmap Ltd.

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