Catapult Sports Ltd (ASX: CAT) shares shot higher last week after it released a FY26 trading update.
It has been a bumpy year for the global sports data and analytics company, which is down roughly 20% year to date.
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What did the company announce last week?
The company revealed that it expects its annual contract value (ACV) for FY 2026 to be in the range of US$133 million to US$134 million with low churn.
This represents year-on-year growth around 27% to 28% on a constant currency basis.
In addition, EBITDA is anticipated to grow by roughly 50% year-on-year, as its profitability continues to outpace its strong top-line growth.
These results sent Catapult shares racing higher last Thursday.
Interestingly, Catapult shares then retreated more than 6% on Friday.
Following the results, Bell Potter released updated guidance on the technology stock.
Here's what the broker had to say.
Good end to the year
According to Bell Potter, Catapult's expected annual contract value is now higher than it previously expected.
The broker said free cash flow is forecast at $5–6 million, below expectations, but this is due to timing of payments rather than a fundamental issue.
Bell Potter sees the strong annual contract value (ACV) result as the main positive, showing good business momentum.
Following the results, Bell Potter only updated its FY26 forecasts for ACV, cash flow, and management EBITDA.
Its forecasts for revenue and statutory EBITDA remain unchanged, as the higher management EBITDA is believed to come from accounting adjustments rather than stronger underlying performance.
No changes have been made to FY27 or FY28 forecasts yet.
We choose not to make any change to our FY27 or FY28 forecasts at this stage – despite the stronger than expected year end ACV in FY26 – given, firstly, the lack of any other details regarding the FY26 result and, secondly, the strategy session next week which may provide further details.
Buy recommendation unchanged from Bell Potter
As a result, Bell Potter has retained its buy recommendation.
However it did lower its price target slightly to $4.75 (previously $4.85).
From last week's closing price of $3.41, this indicates a healthy upside potential of 39%.
The net result is a modest 2% decrease in our TP to $4.75 and we maintain our BUY recommendation. Catapult remains our preferred mid cap exposure in the tech sector.
Bell Potter isn't the only broker with a positive outlook on Catapult shares.
9 analysts forecasts via TradingView have an average one year price target of $6.11.
This indicates approximately 79% upside from current levels.
