The Nearmap (ASX:NEA) share price is up 20% in 3 weeks. What’s happening?

What’s lit the fire under Nearmap in recent weeks? We take a look

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As we close out the ASX trading day this Thursday, it’s clear the Nearmap Ltd (ASX: NEA) share price has once again given investors a top day of returns.

Nearmap shares have closed at $2.20 each this afternoon, up a healthy 3.29% for the day. In contrast, the S&P/ASX 200 Index (ASX: XJO) ended up in the red today, closing at 7,430 points, down 0.25%.

But that’s not where the fun for Nearmap investors ends. This aerial mapping company is now up an impressive 20% over just the past 3 weeks alone.

So what’s been pushing Nearmap up so decisively in recent times?

Nearmap share price flies higher

The first thing to note is that while this recent performance is objectively impressive, it doesn’t take away the fact the Nearmap share price has been struggling over a longer timeframe.

In fact, even after the eye-catching run it’s been on over the past few weeks, it remains down around 3% year to date in 2021 so far. It’s also down by around 8% over the past 12 months, and 46% off of its most recent all-time high, which we saw way back in June 2019.

Longer-term investors would be ok with that though. Nearmap is still up nearly 190% over the past 5 years.

But back to the present. It’s not entirely clear why Nearmap has enjoyed such an enthusiastic sentiment from investors over most of October. There hasn’t been much in the way of news or announcements out of the company itself recently.

However, one possible explanation might be the opinions of some expert investors. As my Fool colleague James covered a few weeks ago, broker Morgan Stanley is very bullish on Nearmap. The broker rated this company as ‘overweight’, with a 12-month share price target of $3.20. That implies a potential future upside of about 45% on the current pricing.

Morgan Stanley reckons Nearmap’s shares are undervalued based on its growth potential and expects margin improvement to boost this company’s fortunes going forward.

It’s also possible some investors decided the pricing Nearmap reached at the start of October was simply too good to pass up.

Whatever the reasons for Nearmap’s recent run, it’s sure to have shareholders pleased.

At today’s closing Nearmap share price, this company has a market capitalisation of $1.1 billion.

Should you invest $1,000 in Nearmap right now?

Before you consider Nearmap, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Nearmap wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nearmap Ltd. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. 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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