When a stock surges 30% in two trading sessions, most investors assume they missed their opportunity.
In the case of Catapult Sports Ltd (ASX: CAT), however, the recent rally may be the beginning of a much longer re-rating.
The sports technology company just delivered its strongest full-year result in its listed history.
The numbers behind the business tell a story that deserves far more attention than it has received.
What Catapult actually does
Catapult provides performance analytics, athlete monitoring, video analysis, and scouting intelligence to professional sports teams around the world.
Think GPS wearables tracking player movement, heart rate, and workload during training and matches, combined with video analysis tools that help coaches and analysts break down tactics and opponent patterns.
The company counts more than 3,800 professional sports teams across 40 sports and 100 countries as customers, including teams in the NFL, NBA, EPL, and AFL.
Critically, once a team integrates Catapult’s systems into its training environment, switching costs are extremely high.
Customer retention sits above 96%, a figure that reflects just how embedded the platform becomes in a team’s daily operations.
The FY2026 result
The full-year result released this week was outstanding.
Catapult delivered record revenue of US$140.7 million, up 19% in constant currency, alongside a 67% jump in management EBITDA to US$24.7 million.
Annualised Contract Value (ACV), the key forward-looking metric for a subscription business like Catapult, grew 28% in constant currency to US$133.8 million.
The company added 576 new professional teams during the year and pushed its average ACV per professional team above US$30,000 for the first time, up 10% year-on-year.
Contribution margin expanded from 49% to 53%, and operating profit margin improved from 13% to 18%, reflecting the powerful operating leverage emerging as the business scales.
CEO Will Lopes said:
FY26 was a transformational year for Catapult. We set ourselves ambitious targets: maintain our organic growth rate, reinvest meaningfully in our platform, and stay focused through a period of significant M&A. We delivered on all of them.
What Bell Potter thinks
Bell Potter responded immediately to the result with an upgraded price target of $4.65, up from $4.50, while retaining its buy rating.
The broker stated:
FY26 management EBITDA, the key earnings metric, of US$24.7 million was 8% above our forecast of US$23.0 million and 10% above consensus of US$22.4 million. Notably, the guidance was 50% growth and it came in at 67%.
Bell Potter added that FY2027 guidance for ACV growth of 27% to 28% in constant currency and EBITDA growth of approximately 50% year on year underpins its confidence in the stock.
In addition, Catapult enters FY2027 in a strong financial position, with no debt and free cash flow of US$6.5 million.
This should give it the flexibility to continue investing in product innovation and bolt-on acquisitions.
The bigger picture
The global sports analytics market is still in its early stages of adoption.
Most professional teams globally have not yet deployed the full suite of performance analytics tools that Catapult offers.
What’s more, the company’s land-and-expand model means that each new customer relationship has the potential to grow substantially over time as teams add more modules and products.
Lastly, the AI integration roadmap that Catapult outlined at its strategy session earlier this year points to a new generation of products that could meaningfully increase the value the platform delivers to each customer.
Foolish takeaway
Catapult Sports is not a cheap stock on traditional metrics, and the recent share price surge has compressed the margin of safety somewhat.
However, for investors who can look past the short-term valuation debate and focus on the quality of the underlying business, the compounding growth in contracted revenue, and the size of the untapped market opportunity, Catapult Sports may be one of the more interesting ASX small-caps in the technology sector today.
The post Why this ASX small-cap could be the most interesting tech stock on the ASX right now appeared first on The Motley Fool Australia.
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Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Sports. The Motley Fool Australia has positions in and has recommended Catapult Sports. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.