Why has the Nearmap share price dumped 20% since the end of March?

Why has the Nearmap share price tanked over the past two months?

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Key points

  • It's been a rough two months or so for many ASX shares
  • But ASX tech shares, including Nearmap, have been hit particularly hard
  • Aerial mapping company Nearmap has lost 20% over this time

The past two months or so haven’t exactly been a happy time for ASX shares. Since the end of March, the All Ordinaries Index (ASX: XAO) has lost around 4.2% of its value. But it’s been a far harder time for the Nearmap Ltd (ASX: NEA) share price.

Nearmap, an aerial mapping company, has seen its shares fall from more than $1.50 each in late March to today’s price of $1.175 at the close of trade on Friday. That represents a fall of more than 20% in just two months or so.

So why have Nearmap shares been suffering so severely over the past two months?

Why has the Nearmap share price tanked?

Well, it’s not entirely clear what’s happened to the Nearmap share price.

It’s very possible that these falls could have been sparked by the flood of cash we have seen fleeing the tech sector over the past few months. Tech shares of all shapes and sizes have been experiencing some heavy volatility over the year to date.

Since late March, the S&P/ASX All Technology Index (ASX: XTX) has lost close to 20% of its value. We’ve seen this play out in other ASX tech shares like Block Inc (ASX: SQ2), Zip Co Ltd (ASX: ZIP) and Xero Limited (ASX: XRO).

All of these companies have lost more than 20% of their value since the end of March. Block is down almost 40%, Zip almost 50%. So in the context of these moves, the Nearmap share price’s experience doesn’t seem too peculiar.

According to an expert…

But Nearmap has also been suffering from some coolness towards its shares from ASX brokers. Back in April, my Fool colleague covered how broker Macquarie downgraded Nearmap shares to a neutral rating, with a 12-month share price target of $1.34. This may have helped Nearmap shares slump 3.5% at the time. Not exactly a ringing endorsement.

So it’s probably a combination of these factors that have led Nearmap shares to such a dismal performance of late. No doubt investors will be hoping the next two months are more fruitful than the last two.

At the current Nearmap share price, this ASX tech share has a market capitalisation of $581.56 million.

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. has positions in and has recommended Block, Inc., Nearmap Ltd., and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., Nearmap Ltd., and Xero. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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