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Here’s why Nearmap shares are looking hot today

Tom Richardson
Aerial view of Sydney

The Nearmap Ltd (ASX: NEA) share price is up 8.4% today despite the aerial-mapping business releasing no specific news to the market.

On June 6 the company did reveal the launch of its beta 3D online imagery product and a beta version of of some artificial intelligence products. 

The 3D imaging functionality should add value to Nearmap’s multiple client sector base that includes local government, construction, solar panel, or swimming pool companies, among many others.

For example a swimming pool business can now accurately measure to the nearest few centimetres the space in a backyard, while using Nearmap from their office in order to plan the design of a house and pool.

Or a local council could potentially use the detailed mapping images to audit from their offices whether or not local private residences comply with safety regulations around the fencing off of private swimming pools.

More generally a municipal government body could measure the heights of buildings or distances between them when assessing any manner of town or security planning obligations for example.

 As such we can see how the imagery can save its users a lot of time and money while operating more effectively.

Outlook

Generally speaking the better a start-up type company’s technology the wider its moat in defending its market share from competition.

Therefore if Nearmap has more sophisticated and patented tech to offer its clients then investors should take this as a positive especially as it offers the opportunity for up-selling. 

At the end of the day though, it’ll be Nearmap’s profit or revenue growth that sees the shares sink or swim over the 12-24 months, with a potential end of financial year update possible by July 2019. 

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Motley Fool contributor Tom Richardson owns shares of Nearmap Ltd.

You can find Tom on Twitter @tommyr345

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