Some more of the BP report... Quote.. Forecast strong earnings...

Some more of the BP report...

Quote..

Forecast strong earnings growth. nearmap is scheduled to report its 1HFY15 result on Wednesday, 18th February. Our key forecasts are: NPAT: Up 174% to $2.1m; EPS (diluted): Up 154% to 0.6cps; DPS (interim): None; Total revenue: Up 46% to $11.9m; EBITDA: Up 72% to $3.1m; and EBITDA margin: Up from 22.5% in 1HFY14 to 26.5% in 1HFY15. nearmap has provided 1HFY15 guidance for sales revenue of between $11.3m and $11.6m and our forecast of $11.5m is consistent with this guidance (note total revenue includes interest revenue which we forecast to be $0.4m). Note that, while we expect strong earnings growth in 1HFY15 relative to 1HFY14, we do expect earnings to fall relative to 2HFY14 due to the expansion into the US market, increased head count in Australia and the lack of any tax benefit.

No FY15 guidance expected. We do not expect nearmap to provide specific guidance for 2HFY15 or FY15 as it is not the company policy to provide specific guidance. Rather, we expect nearmap to reaffirm its revenue run rate target for Australia of $30-50m by December 2015 and to provide an update on the company's expansion into the US market.

Investment view: Retain BUY, PT $0.85 We retain our BUY recommendation and $0.85 price target on nearmap. Our price target is generated from a blend of three valuation methodologies: PE ratio, EV/EBITDA and DCF. At this price target the total expected return is 42% which well supports a BUY recommendation.

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