From dirty rascal to king of the castle?
Interesting recent AFR report and commentary on Catapult:
I can understand long-term shareholder frustration but I’m personally liking the narrative of Catapult’s longevity and pedigree in a competitive space. It feels like this industry is still in ‘land-grab’ mode and that just holding on to the high-ground is most of the current battle — the spoils of that war come later. The tech devices and cameras themselves are ultimately commoditised long-term I think. I wrote a somewhat harsh bear case on Catapult, several years ago, on that part of the story and have since been proven wrong. It looks like the aim of the game is to be the king of the castle with the commanding views. The fight for positive free-cash-flow might be just the bloody and muddy bit the first kings do before their successors can live off the spoils by taxing the masses. The latter is the golden age. The good bit between the massacring warlord and eventual decline (when the great-great grandkids publish whingey ghost-written autobiographies). The former never looks pretty — even in hindsight.
The prize is dominant market-share of elite sport. My investment thesis is one of eventual pricing power and/or buy-out.
SaaS, can normally make me a bit ‘meh’ when I read or hear that. Everything seems to be SaaS now. But I definitely don’t know enough about it in this case. To me, however, this company is starting to look a bit more analogous to US based AXON which I like. Very different field, but in that case, the original tech (the taser) now pales in future significance to their data storage solutions (their database of body worn camera footage) which generates much larger margins, stickiness, and ARR.
Maybe Catapult will stand the test of time yet.
