Up 80% in a year, this ASX All Ords stock is a 'long way short' of its true value

This fund manager is bullish.

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Catapult Group International Ltd (ASX: CAT) has been a standout ASX All Ords stock in the last 12 months, surging 89% to $1.83 currently. This is an 81% advantage over the benchmark S&P/ASX 200 Index (ASX: XJO) in the past year.

It has also been all green for the stock since trading began in January – up 32% year to date.

Despite this impressive gain, many believe this ASX All Ords stock still has room to grow. Let me explain.

What's driving this ASX All Ords stock?

Catapult's growth has been driven by strong financial performance and strategic initiatives. For the financial year ending 31 March 2024, the ASX All Ords stock's revenue reached a milestone of US$100 million, a 20% increase year over year.

This growth reflects the strength of its software as a service (SaaS) strategy, which has been pivotal in attracting new customers and increasing the annualised contract value (ACV).

Forager Funds Management has been optimistic about Catapult's potential for a long time. In its latest report from May 2024, the firm noted that it hopes "…to be writing about Catapult for years to come. For many years, we have admired the opportunity ahead of this company."

The fund manager highlighted the ASX All Ord stock's well-known athlete tracking vests, which are used in various major sports leagues worldwide.

Any avid sports-watcher will be familiar with Catapult's athlete tracking vests. You can see them through Pat Cummins' whites on a summer day at the SCG or at a training session for every single NRL and AFL team in Australia.

Forager also praised Catapult's strategic vision under CEO Will Lopes. "When appointed in 2021, CEO Will Lopes didn't do much to change the perception that shareholders would never see potential translate to profits", it said.

But three years later, it says Lopes was right, that Catapult "needed to spend more", and "needed to spend first". Forager believes he is the "right man" to do the job.

The share price has reacted positively to the past few results announcements from Catapult but we still think it is a long way short of the company's true value.

What does Catapult's future look like?

The company's FY 2024 results were a standout, with Forager noting over 40% of the revenue growth "translated to incremental profit".

"The growth should be similar in 2025 and management expects that incremental profitability to increase further", it added.

For FY 2025, the ASX All Ords stock's management said in the last earnings that it aims to sustain strong ACV growth and high retention rates.

The company plans to align with the Rule of 40 – a key valuation metric for SaaS companies – which combines revenue growth rate and profit margin. Catapult achieved a 43% rate last quarter, exceeding the 40% benchmark. It looks to maintain this next year.

Foolish takeaway: ASX All Ords stock with growth

Despite its substantial share price increase over the past year, this ASX All Ords stock's strategic initiatives and financial performance suggest there is still considerable room for growth.

The company's focus on technology, customer retention, and profitability positions it well for continued success. Investors will be watching closely to see how Catapult executes its plans in FY25 and beyond, making it a compelling ASX All Ords stock to keep on your radar.

Motley Fool contributor Zach Bristow 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 Catapult Group International. The Motley Fool Australia has recommended Catapult Group International. 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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