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Why the Catapult International Group Ltd share price is surging higher

Credit: Mags

The share price of sports analytics business Catapult International Group Ltd (ASX: CAT) has climbed 15% higher today to $1.88 after the company announced a new commercial agreement to provide GPS athlete tracking data to all 18 Australian Football League (AFL) clubs.

The data will be supplied via a partnership with sports analytics business Champion Data and Catapult will receive an annual subscription payment plus a share of new revenue generated from any commercial applications of wearable data.

Catapult is not just supplying its local AFL teams though, with some of the world’s biggest sports teams in North America and Europe on an impressive client list that suggests its sports analytics products are starting to gain traction.

Recently the business stated it expects to sell 8,000 units this financial year with a total contract value up to $24.5 million. Investors clearly like the potential of this stock as well, ascribing a valuation of around $78 million (or $218 million when including the stock escrowed under the prospectus) with the share price now tripling over the last year. Given the progress being made and fact it is not on an outrageous tech stock type valuation it’s possible to suggest this business remains a speculative buy.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

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Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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