MENU

Why the Catapult Group International Ltd (ASX:CAT) share price raced 21% higher today

One of the best performers on the local market on Wednesday has been the Catapult Group International Ltd (ASX: CAT) share price.

The sports analytics and wearables company’s shares rocketed 21% to $1.19 this morning.

Why are Catapult’s shares rocketing higher?

This morning Catapult released an update on its first quarter performance and provided guidance for the full year.

According to the release, the company has had a solid start to FY 2019 and has seen group cash receipts from customers rise 25% on the prior corresponding period to $34.7 million.

The solid quarterly performance was driven by strong growth in its Elite Wearables segment, which saw revenue grow 51% on the prior corresponding period thanks to unit sales of 1,729.

The signing of major customers including the French Football Federation, Real Madrid, and the Football Association of Wales also boosted revenues.

In addition to that, management reported that its Prosumer offering has started well and has gained positive reviews in a number of industry magazines. It also signed a partnership with Fuse Soccer for its use at the Universal Orlando Resorts in association with Celtic FC and New Balance.

What about FY 2019?

Looking ahead to the full year, management expects revenue of between $86 million and $88 million in FY 2019. This implies growth of between 17% and 20% on FY 2018’s result. It has also forecast similarly solid growth in its annualised recurring revenues.

Underlying core EBITDA is expected to be between 37% and 63% higher year on year to between $11 million and $13 million.

Looking even further ahead, the company confirmed that it is on track to generate positive cash flow by FY 2021.

Should you invest?

I thought this was a positive quarter for Catapult. However, it is traditionally the company’s strongest quarter by some distance, so it may be a little soon to get overly excited.

But it is admittedly a step in the right direction for the company and a few more quarters like this might have me considering an investment. But for now, Catapult remains on my watchlist.

In the meantime, small cap tech shares such as Citadel Group Ltd (ASX: CGL), ELMO Software Ltd (ASX: ELO), and Megaport Ltd (ASX: MP1) may be better options for investors.

Or maybe this buy-rated tech share that has been tipped as a market-beater.

Motley Fool Australia Issues Rare "Double Down" Buy Alert

Scott Phillips has stumbled upon a little-owned stock he believes could be one of the greatest discoveries of his 25 years as a professional investor.

 

This is your chance to get in early on of what could prove to be a very special investment recommendation. Think about how many investing trends you've missed out on, even though you knew they were going to be big. Don't let that happen again. This is your chance to get in early.

Simply click here to get started and access our secure sign-up page.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Catapult Group International Ltd and ELMOSFTWRE FPO. The Motley Fool Australia owns shares of Citadel Group Ltd. 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 Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!