Catapult Sports Ltd (ASX: CAT) could be an ASX tech share to buy now.
That's the view of analysts at Bell Potter, who believe the sports technology company's shares are undervalued after falling around 60% from their high.
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What is the broker saying?
Bell Potter notes that Catapult shares have fallen heavily and missed out on a rally that has seen Life360 Inc (ASX: 360), Pro Medicus Ltd (ASX: PME), and TechnologyOne Ltd (ASX: TNE) shares rebounding strongly from their lows. It commented:
The Catapult share price fell by c.5% in the June quarter despite a good FY26 result in May and a reasonable rally in the share prices of other good quality tech stocks such as Life360, Pro Medicus and Technology One (up 42%, 74% and 10% respectively). The reason for the relative underperformance is unclear as Catapult has similar qualities to these other names including being global, a market leader, a high level of recurring revenue, positive free cash flow, proprietary data, low churn and a strong Balance Sheet.
The broker finds this strange, especially given that the ASX tech share appears well-placed to avoid artificial intelligence (AI) disruption. It adds:
Catapult also seems well protected against AI disruption – like the other stocks mentioned – given the proprietary data and the hardware component of its solutions which is difficult to replicate. The key difference perhaps is that Catapult is much smaller than those other stocks and, for instance, is only in the S&P/ASX 300 whereas the others are all in the 100. This then suggests the rally is mostly in the quality large cap tech names at present but, if it continues, should extend into the quality mid cap tech stocks which include Catapult.
ASX tech share tipped to rocket
According to the note, Bell Potter has retained its buy rating and $4.65 price target on Catapult's shares.
Based on its current share price of $3.14, this implies potential upside of almost 50% for investors over the next 12 months.
Commenting on the tech share and its investment thesis, Bell Potter said:
There is also no change in our $4.65 target price which we also updated in late May. This remains a significant premium to the share price and we maintain our BUY recommendation. There is perhaps a lack of catalysts for Catapult given the company does not tend to announce contract wins – given they are not individually material – and the next result is not until November.
A short term rally in the share price is perhaps therefore dependent on a continued rally in the tech sector which, as mentioned, should flow through to quality mid cap stocks at some stage. The stock does, however, also look reasonable value on an FY27 EV/EBITDA multiple of c.19x based on management EBITDA (which is close to an underlying cash EBITDA).
