At the time of writing, the aerial imagery technology and location data company’s shares are up 7% to $1.84.
Why is the Nearmap share price charging higher?
There appear to be a few potential catalysts for the strong gain by the Nearmap share price on Monday.
The first is bargain hunters. With the Nearmap share price crashing 19% lower last week, some investors appear to believe it has been oversold and are taking advantage today.
Another potential catalyst is some significant insider buying. This morning it was revealed that Nearmap’s Chairman, Ross Norgard, has added to his considerable holding.
A change of director’s interests notice reveals that Mr Norgard purchased 500,000 shares via an on-market trade on Friday 7 May.
The chairman paid a total consideration of $928,496, which averages out to be $1.857 per share. This is still higher than where it trades right now.
Top broker remains positive
A third and final potential catalyst for the rise in the Nearmap share price today is a broker note out of Morgan Stanley.
According to the note, the broker has held firm with its overweight rating and $3.20 price target despite the legal proceedings that were announced last week.
Based on the current Nearmap share price, this price target implies potential upside of 74% over the next 12 months.
Morgan Stanley believes the legal proceedings pose a greater risk for near-term liquidity rather than its earnings power. As a result, it remains positive on the company and believes the market is undervaluing its businesses.
This is particularly the case for the North American business according to Morgan Stanley. It is bullish on this side of the company and expects it to be a key driver of growth in the future. This is due to its larger opportunity and superior economics.