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Why has the Catapult share price soared today?

The Catapult Group Ltd (ASX: CAT) share price is up 11% to 88 cents today despite the sports analytics and software business releasing no specific news to the market.

Today’s share price rise could be the result of bargain hunters anticipating the company delivering a stronger-than-expected quarterly update later this month that could make the shares look cheap using conventional valuation metrics.

Catapult delivered $76.8 million of revenue in FY 2018 with more than $53 million of that in annual recurring revenue thanks to its software-as-a-service business model.

For FY 2019 Catapult is guiding for revenue between $86 million to $88 million and underlying core EBITDA of $11 million to $13 million.

Catapult currently has 188.4 million shares on issue to give it a market value around $166 million, which is just under 2x its forecasts for FY 2019’s sales.

In other words it looks very cheap compared to high profile software-as-a-service businesses like Wisetech Global Ltd (ASX: WTC), Pro Medicus Limited (ASX: PME) and PushPay Holdings Ltd (ASX: PPH).

For investors then Catapult looks worth keeping a close eye on.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Catapult Group International 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.