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Why the Nearmap share price raced 8% higher today

James Mickleboro
Aerial view of Sydney

One of the best performers on the S&P/ASX 200 index on Tuesday has been the Nearmap Ltd (ASX: NEA) share price.

In morning trade the aerial imagery technology and location data company’s shares raced over 8% higher to $3.74.

When Nearmap’s shares hit this level it meant they had gained an incredible 144% since the start of the year.

Why did Nearmap’s shares race higher today?

Investors have been fighting to get hold of the company’s shares this morning after a leading broker initiated coverage on it.

According to a note out of Citi, its analysts have initiated coverage on Nearmap’s shares with a buy rating and lofty $4.26 price target.

Even after today’s gain this price target implies potential upside in excess of 14% over the next 12 months.

Citi appears to have been impressed with Nearmap’s progress in FY 2019 and believes it is well-positioned to grow its market share in the United States materially in the coming years. At present the broker estimates that the company has captured less than 1% of the U.S. market.

In addition to this, the broekr likes Nearmap due to the scalability of its business model and its opportunity to expand into other countries in the near future.

Citi isn’t alone in rating Nearmap’s shares as a buy. Last month analysts at Morgan Stanley retained their overweight rating and lifted the price target on its shares from $3.00 to $4.20.

What else does Citi like?

Another small cap and fast-growing tech share that Citi is positive on is LiveTiles Ltd (ASX: LVT). It recently retained its buy rating and lifted the price target on the intelligent workplace software provider’s shares to 94 cents.

The LiveTiles share price is currently trading at 47 cents, which means that Citi’s price target implies potential upside of 100% over the next 12 months.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019