National Mapping And Coastal Resilience Demand Will Drive Long-Term Opportunity In 3D Geospatial Data

Catalysts

About Intermap Technologies

Intermap Technologies provides global high precision 3D geospatial data, analytics and AI driven software solutions for government, defense, insurance and commercial customers.

What are the underlying business or industry changes driving this perspective?

• Scaling of large World Bank backed national mapping programs such as the $200 million Indonesian project and NOAA coastal contracts is expected to convert the current tender pipeline into multi year awards that can lift consolidated revenue and drive operating leverage as aircraft, sensor kits and fixed processing capacity are more fully utilized.
• Rapid adoption of Elevation as a Service, IRAS and AI agents by global insurers to close widening protection gaps in flood and climate related perils supports recurring subscription growth and a higher software and solutions mix, which is likely to expand gross margin and stabilize earnings through contracting cycles.
• Growing demand for multi domain GEOINT and coastal resilience data from agencies such as the U.S. Air Force, NGA, DARPA and NOAA positions Intermap to capture a rising share of long cycle defense and climate infrastructure budgets, supporting backlog visibility and smoothing government driven revenue volatility.
• Global roll out of Intermap’s proprietary 3D foundation data into adjacent verticals including navigation, logistics and telecom network planning enables reuse of existing datasets across more use cases, which can increase revenue per dataset and improve net margins as incremental sales require limited additional capex.
• A strengthened balance sheet, the removal of the going concern qualification and ongoing uplift to PCAOB standards ahead of a planned U.S. listing upgrade should broaden the institutional investor base, lower the cost of capital and support more accretive growth, ultimately benefiting earnings and equity valuation multiples.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Intermap Technologies's revenue will grow by 67.9% annually over the next 3 years.
• Analysts assume that profit margins will increase from -11.6% today to 56.6% in 3 years time.
• Analysts expect earnings to reach $44.0 million (and earnings per share of $1.48) by about December 2028, up from $-1.9 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 9.4x on those 2028 earnings, up from -71.8x today. This future PE is lower than the current PE for the CA Software industry at 51.1x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.94%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Revenue remains highly dependent on a small number of large, long cycle government programs such as Indonesia and NOAA. Delays in tender decisions, shutdown related contracting pauses or losing key bids could create prolonged revenue volatility and make it difficult to achieve the guided 30 million to 35 million revenue range, pressuring earnings and operating cash flow.
• The rapid scaling required to execute multiple large contracts simultaneously, including hiring globally, expanding aircraft operations and upgrading GPU based processing, may outpace Intermap's operational controls and new PCAOB audit standards. This could drive higher costs, implementation inefficiencies and margin compression instead of the expected operating leverage and EBITDA expansion.
• While insurance SaaS and analytics are benefiting from climate related protection gaps and growing private flood markets, the company still reported negative adjusted EBITDA and net losses in the latest quarter. Any slowdown in subscription growth, weaker renewal rates or failure to capture incentive compensation on underwriting value could leave long term earnings and net margin improvement below expectations.
• Secular growth in GEOINT, climate resilience and telecom or navigation use cases does not guarantee that Intermap will maintain a durable competitive edge. If larger, better capitalized peers match its AI driven 3D data capabilities or undercut pricing, the company may be forced to accept lower contract margins and slower revenue growth than assumed.
• The strategy relies on continued access to supportive lenders, equity markets and insured FX lines after the recent 35 million of equity raises. Any deterioration in credit conditions, investor risk appetite or foreign exchange volatility across its global footprint could raise the cost of capital, limit growth investments and weaken future earnings and cash generation.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of CA$5.25 for Intermap Technologies based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be $77.7 million, earnings will come to $44.0 million, and it would be trading on a PE ratio of 9.4x, assuming you use a discount rate of 7.9%.
  
• Given the current share price of CA$2.68, the analyst price target of CA$5.25 is 49.0% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.