let's talk about matterport stock this
stock has dropped like a rock in recent
months and in this video i will look at
where the value is right now
first of all i am bullish on matterport
in the long run but despite dropping so
much i feel that there could be a few
things that need to happen before i buy
in in this video i will discuss the
impact of recent news
i will analyze the real possibilities
that exist for this company and assess
the opportunity but i will also look at
reasons for the price drop and what i
believe will happen and what will
trigger this stock's recovery and i will
tell you the price that i am looking to
buy into Matterport ($mttr) and when i expect to
see this price.
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now let's get into the video
matterport is a market leading 3d
platform that lets anyone turn a
physical space into an immersive digital
twin
Matterport Inc takes real life physical
space and transforms it into digital
twin which is a 3d model using a
combination of different types of
cameras software and applications
this technology has many uses in homes
offices factory shops even museums if
you have ever seen a 3d virtual property
tour
or a virtual museum tour
then you're already familiar with
matterport's technology
this digital 3d model can be used in
many ways such as presenting a realistic
look at a home
that a real estate agent can use for
virtual tours that reach far more
potential buyers than a traditional open
house
the applications for matterport's
technology are endless ranging from
retail construction engineering and more
with more of the physical world becoming
virtual the total addressable market for
matterport's technology is massive
it's essentially every building in every
country in the world ($MTTR Stock)
scans can be captured from any
compatible camera and while mataport had
focused largely on selling their own
range of cameras the advancement in
technology now means that most phones
are capable of this
thousands of companies in over 190
countries use matterport millions of
spaces have been captured comprising
billions of square feet resulting in the
largest spatial data library in the
world which gets bigger every day
matterport (nasdaq:mttr)
has been digitalizing the world
for a decade now with the mission of
making every building in every space
more valuable and accessible
looking at the investors presentation we
can see that matterport has a top-class
management team with highly experienced
executives coming from major global
companies such as google seagate and
ebay
mataport has a 240 billion dollar
global total adjustable market
opportunity as properties move online
and this is calculated at a cost of one
dollar per month assuming a market
penetration of only one percent with
significant upside monetizing digital
property insights and services as high
as 1.2 trillion assuming a five dollar
per space.
Over the past year matterport has
achieved 116%
growth in subscribers although a large
proportion of these are still freemium
paid subscribers has grown at a rate of
33 percent but despite having such a low
market penetration rate the company
claims to have 6.2 million spaces under
management which is digitized
building scans and they estimate it has
100 times the amount of spaces on its
platform as the entire rest of the
market combined
matterport has a range of high
resolution camera options to suit all
environments as well as a free no cost
approach of using a decent smartphone
Matterport capture
is now compatible
with about 74% of all devices
the company's plan of offering free
subscriptions is being used as a way of
capturing potential subscribers with a
view to converting these into paid
subscriptions over time which tends to
be a very good business model in order
to obtain a high level of customers
quickly and hopefully a percentage of
these will become dependent on the
service and convert into paid
subscriptions
one of the major advantages the
matterport has is its first mover
advantage in a potentially massive and
largely untapped digital reconstruction
market
which is indicated clearly by the fact
that they have 100 times more digital
space than the rest of the market
combined
matterport breaks down its revenues into
four categories subscription
which is about fifty percent of sales
and management expects more than eighty
percent of revenue to be subscription
based by 2025
products account for 39
due to its pro camera but i expect this
to decrease rapidly as smartphones get
even better
with services and license solutions
making up the remaining revenue
mataport has an incredibly scalable
business model operating a freemium
model customers are drawn in with free
subscriptions then gradually transition
into paid subscribers as they recognize
the value and cost saving potential of
matterport's 3d data and this is where
the company can make most profit
subscription business
operated at about 77 gross margin during
the last quarter
indicating the potential for substantial
profitability growth as the company
continues to scale its subscriber base
and transition away from product-based
sales such as cameras which have very
little margin
the subscription-based model provides a
recurring revenue stream which is great
to see and offers increased visibility
into future revenue streams matterport
has seen a 29x increase in subscribers
since 2018.
cushman and wakefield one of the world's
largest commercial real estate companies
increased their spend by 26 fold
while eriksen increased their spin by 60
in just one year
in fact mataport's customers include 13
of the fortune 1000 so the potential is
there to turn these customers into paid
subscribers and a recurring revenue
source
although all of this sounds great
matterport's current financials are not
so great so stick around and i will look
at these later in the video
now the real buzz around matterport in
the past few months and a reason why
this company divides opinions so much is
the company's potential for a major role
in the metaverse
of course anyone who thinks the
metaphors is a load of bs
will not see the potential here and even
large amounts of those who think the
metaverse will be big still don't see
the potential
take a moment
search google images for the metaverse
what do you find lots of images of a
world that looks very computeristic
the image that most people have
of the metaverse
is like that of a ps2 game from 20 years
ago
do you really think that this is what
mark zuckerberg has in mind when he
rebranded facebook as meta
even computer games don't look like this
anymore
gaming has evolved so much that many
games now look very real at first glance
this is where mataport comes in
why would you want
a metaverse that looks like this when
you can have a metaverse
that looks more like this the real
vision for the metaverse
is of a world that is almost real
almost like a matrix type of world
for example this article on nasdaq.com
discusses this brilliantly
check out the link in the description
below is australia a place you've always
wanted to visit in the metaverse you
could explore the australian outback
more easily than you can get into an
outback steakhouse in your hometown you
could see the
sydney opera house
the street art on hozier's lane in
melbourne then stroll
the swan river in perth all with zero
travel time
several sites like these are already
captured as matapor digital twins from
there the web 3 metaverse incentivizes
matterport service partners to map out
all of these major cities and
destinations this is what the metaverse
will be like and realistic spaces were
exactly the vision mark zuckerberg
presented at his big murder verse event
back in october guys if you enjoyed this
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you can get access to when i find these
new opportunities looking at marketbeat
we can see that matterport is currently
at the bottom of its 50-day range and
52-week range this shows that matterport
has dropped over 75 percent of value
recently and might now be undervalued at
just over two billion dollars
with institutional ownership currently
over twenty six percent the most heavily
invested institutions are morgan stanley
senator investments and black rock
looking at the most recent data
available of fintel the short interest
days to cover is 1.14
while the short float is now 10.54
the analyst pricetag consensus is twenty
six dollars and eighty cents
the most recent rating and price targets
was set this month by credit suisse
analyst john walsh
who set a buy rating but lowered his
price target to thirty one dollars
which is more than 300 upside from the
current price
looking at tip ranks we can see that
john walsh is a five-star analyst with a
66 success rate
while the other recent price target of
38
was set by web bush analyst daniel eves
who was also a five-star analyst
according to tip ranks with a 65 success
rate
taking a look now at the most recent
financial statements that were published
in october we can see that matterport
has total assets of 653 million and
total liabilities of 447 million
this gives matterport an asset to
liability ratio of about 1.5 to 1.
the assets
is mainly highly liquid assets and a
high portion of liabilities
is this earn out liability
this is subject to remeasurement but
without this the asset to liability
ratio would be six to one which would be
fantastic
looking at the income statement we can
see that matterport has revenue of over
84 million for the year so far showing
solid revenue growth and a really good
gross profit however sizable operating
losses mean a loss from operations and a
very large net loss of 177 million
dollars so far this year
but this is very misleading
nearly 75 percent of this loss is due to
the change in fair value of warrants and
earned liability
so what is this exactly
well i said a moment ago
that the earn out liability is
re-measurable if the share price rises
then this liability gets bigger and its
impact gets bigger if the share price
falls this liability gets smaller
looking at the notes of the accounts the
earn out shares can be activated in
tranches of 3.9 million shares
being activated
from 13
up to 25
now these accounts were for the period
up to the 30th of september
at the time the share price was
somewhere between 18 and 19
now this is extremely important
matterport earnings are expected on the
2nd of february
this will be for the period up to the
30th of december the share price at this
time was over 20 dollars
this liability should be even more in
these earnings and i expect
the share price to fall steeply
however given the current share price is
so low
that none of these earn out shares would
ever be activated
remember 13 is the lowest
activation point i fully expect the
following earnings report in may to show
a huge shift in the profit and loss for
matterport due to this re-measurement
change in fair value
and with increased revenue and margins i
expect this to be the time when mataport
bounces back strong
and the q1 earnings report will also
include a balance sheet greatly boosted
by the recent redemption of all the
company's warrants at 1150 giving
proceeds of over 104 million dollars
meaning that no public warrants remain
outstanding
before i give you my prediction if you
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drop a comment and let me know what you
think of mataport have you invested and
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stock ideas that i believe will make big
gains this year at the current price i
think that this is an okay entry point
into matterport stock
in the long run i am bullish and i do
believe that matterport will be huge
but a few things need to happen first
if the metaverse takes off then the
possibilities are endless if not however
there is still a huge business
opportunity digitizing the real world
although matterport has dropped close to
80 percent
of its value
i feel that it could drop more over the
next couple of weeks
and i think that somewhere between
67
will be a very good entry point
i do feel that this talk will begin to
turn upwards
during the first half of the year before
the release
of the q1 2022 report so keep an eye on
that this is not financial advice and i
am not a financial advisor and my videos
should be viewed for entertainment
purposes i highly recommend investing
only money that you can afford to and
always do your own due diligence when
investing
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next one