Forum Topics Nearmap Ltd General Discussion
Gromit
2 weeks ago

I sold my small position in nearmap outside of strawman back in 2019 there was a competitor and it's moat I felt had been breached accordingly.

Also it's talk of capital raising was another flag as a dilution factor

 I think I sold out for very little gain but redirected the money into long term wealth winner

nearmap as far as it's mapping goes will have to keep raising funds to keep up with product development I can see in the near future that this will need the support of many investors which may or may not prove to be profitable in the long run 

This was where I actually felt the story of the company had changed dramatically 

I hope the company and its employees do go on to become profitable for all involved good luck????

9
0
Reply
Tom73
2 months ago

Nearmap - First Half Result (First Impressions)

Looking at the anaylist pack and comparing to my expectations (I own and follow NEA) I think the result is solid, nothing to get exited about but a better than the short report would have you expect.  My take on the KPI's I watch for NEA:

 

The Good:

1. ACV growth of $11.1m at constant currency (CC) up 21% on pcp.  ACV now at $112.2m ($116.7m at CC) I had expected a soft half due to economic conditions and this came in up $0.5m on my expectations with FX headwind.

2. Retention % up 5.4% from pcp to 93.9% - this is massive, I had hoped it would get back to a 92% run rate so a plesant surprise.  Retention was looking to be a worry and this is a very strong recovery - assuming it isn't artificiarly driven...

3. LTV up 148% from pcp to $1.45b or 154% in CC - the retention improvement will be the main driver of this.

4. US market growth (critical for value upside) growth of 41% in ACV, retetention up to 93.5% from 79.4%, sales team contribution ratio up from 34% to 110%.  

5. Profitability improvements - cost controls and top line growth have reduced NPAT loss 50% increased EBITDA 321% and there is a lot of cash on hand due to the capital raise ($129m)

 

The Not so Good:

1. ACV growth was dominated by upsell rather than new business which is a change.  Previously about 2/3 ACV additions have been new business and 1/3 upsell, now it is reversed.  It may be a sign of maturity or competition pressure as new business ACV addition was 43% down on pcp.

2. FX headwind - ACV growth would have been $4.6m higher but for FX, I see this as a tempory issue and tend to look through FX.

3. I am concerned that they have switched from growth to cash generation.  Operating cash is strongly positive and even FCF is positive and improvements in cost to income ratios as well as the switch to growth from existing rather than new customers could all indicate such a shift.

 

Lots more details to go through and I will review my IV calculation this week, which sits at $2.54 before the results, but first impressions are that it isn't going to move a hell of a lot.

Cheers.

14
0
Reply
Samurai
2 months ago

Rebranding to Nearcrap =)

4
5
Reply

Mossy
2 months ago

Maybe the Reddit crowd will help us out!

2
0
Strawman
2 months ago

Thanks for sharing the Short Sell report on Nearmap @Rapstar. As PMonkey said -- scathing.

And quite compelling to. 

Talking to disgruntled former employees is always going to give you lots of negative material, but if there's any legitimacy to what they are saying in terms of inflexible and unfavourable pricing, difficult market dynamics and inferior product experience then that's a genuine concern. Let alone the allegation of 'generous' account techniques.

I've been pretty tolerant of a widening cost base as Nearmap moved into the US, given that it seemed they were building good sales traction. At the time i felt a few of their capital raises were opportunistic, but not terrible if it secured cheap capital. Likewise, competition in and of itself didn't worry me too much -- so long as i felt i understood the market dynamics. But I have to admit i probably dont understand the situation as well as I thought.

It's worth remembering that JCap have a strong financial incentove to make the short case as scary as possible. And it's not like Short sellers are always right either. But they do present a worrying case.

I have a tiny holding in my Strawman portfolio and also in real life (having first bought some shares in 2014 at ~50c) -- as you'll see from my valuation (https://strawman.com/reports/NEA/Strawman) , aside from the covid dip last year, there just hasnt been enough of a value proposition to hold a significant amount of shares. After today's report, my conviction in the valuation has materially declined.

There's not much to be done with shares suspended for now, but before i do anything I'll be eager to hear how NEA management respond. 

22
0
Reply

Tom73
2 months ago

Highly suspicious - a short thesis coming out 1 week before the half year results! Are they trying to drive the price down to exit their short rather than risking a share price pop on the half year results? Results this reporting season have been overwhelmingly above expectations - not a happy situations for short sellers. I hold NEA, have some concerns, but will wait for the half year accounts before judging!

9
0