Valuation Comparison, page-8

http://www.thebull.com.au/premium/a/75077-stocks-to-score-from-the-football-world-cup.html

My preferred sporting play at current prices is sports-data provider, Catapult Group International. The maker of wearable sport technology for elite athletes raised $12 million and listed on ASX in December 2014. Its 55-cent shares peaked at $4.29 before tumbling to $1.24.  

Chart 1: Catapult Group International

Source: The Bull

Management changes, co-founders selling some stocks, capital raisings and earnings below expectation have weighed on the former market darling. Fears of stronger competition in sports-data analytics from European rivals have weighed on the share price.

Key competitor Statsport, an Irish company, this year signed the Brazilian soccer team as a client from Catapult and its technology is reportedly popular with professional soccer teams. Catapult’s reputation as the go-to provider of sports data for professional global sporting teams could be under threat.

But every stock has its price. For all the sharemarket gyrations, Catapult is still a terrific business and a leader in the global market.

Major sporting codes and clubs use its technology to extract real-time data on their athletes and feed it into their sports-science programs. Catapult’s product range covers a variety of high-tech sporting hardware and software. For a time, Catapult could do no wrong on the market.

Longer term, Catapult has potential to move into the “prosumer” sports market as semi-professional or amateur clubs embrace its technology. Or as wealthy private schools or colleges here and overseas use Catapult technology to give their athletes an edge.

Catapult has identified 3 million customers for its global prosumer soccer product – a market that will be boosted by the upcoming Football World Cup. Catapult’s prosumer technology sales are growing strongly, off a low base.

Catapult said it was the first provider of wearable tracking devices to have its technology approved for in-game use by FIFA, according to the federation's International Match Standard (IMS) for Electronic Performance and Tracking Systems.

The company is more leveraged to the World Cup than the market realises, judging by recent share-price performance.

Stockbroker Morgan in June had a buy recommendation and a $1.76 target price for Catapult. An average share-price target of $2.02, based on the consensus of five firms (too small to rely on) suggests Catapult is significantly undervalued at the current $1.24.

Some big investors are taking an interest: AustralianSuper emerged as a substantial shareholder in mid-May. Chartists will look for Catapult to break out of its sideway consolidation pattern around $1.40, a point of previous resistance this year.  

As a volatile micro-cap, Catapult suits experienced, risk-tolerant investors who understand the dangers of investing in loss-making tech companies as they grow rapidly overseas.

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• Tony Featherstone is a former managing editor of BRW, Shares and Personal Investor magazines. The information in this article should not be considered personal advice. It has been prepared without considering your objectives, financial situation or needs. Before acting on information in this article you should consider the appropriateness and accuracy of the information, regarding your objectives, financial situation and needs. Do further research of your own and/or seek personal financial advice from a licensed adviser before making any financial or investment decisions based on this article. All prices and analysis at June 13, 2018.