The company reported a strong first quarter, with underlying cash from operations up more than 60%. Underlying earnings from Elite wearables and video continue to grow strongly, while the main negative from the update is that the margin on Prosumer devices in FY19 is likely to be well below market expectations.
Morgans observes the share price is substantially below its valuation and retains an Add rating. If Catapult meets expectations in FY19 the broker believes the risk discount currently applied to the stock will ease up. Target is $1.88.
Sector: Technology Hardware & Equipment.
Target price is $1.88.Current Price is $1.15. Difference: $0.73 – (brackets indicate current price is over target). If CAT meets the Morgans target it will return approximately 39% (excluding dividends, fees and charges – negative figures indicate an expected loss).