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Is a 70% Fall in Matterport Stock a Buying Opportunity?


We’re not even two full months into 2022 and some charts make for almost comical reading based on the absurd drops some stocks have exhibited.

For instance, since the turn of the year, shares of Matterport (MTTR) have already shaved 70% off their value.

The volatile market conditions can be partly to blame, but it hasn’t helped that the spatial data company announced a disappointing outlook when delivering 4Q21’s financials earlier this month.

However, Deutsche Bank’s Bhavin Shah recently met with Matterport’s management, and found the company in confident mood. “The team continues to be enthusiastic about the opportunity to digitize the built world and remains focused on capture ubiquity to accelerate growth,” the analyst said.

Shah highlights several key takeaways from the conversations.

First off, the company is still “very bullish” on the recent hardware announcement of Axis, Matterport’s motorized mount for smartphones, noting “strong pre-launch interest from enterprise customers.”

By removing from a scan human interference and allowing for improved accuracy, Axis will enable users to better scan a space with a mobile device. “We anticipate Matterport Axis could help increase paid adoption from Matterport’s mobile subscriber base,” said Shah, who also notes that such solutions could “reduce the reliance” on the Pro2 Camera, which is still feeling the impact of the supply chain issues.

Elsewhere, the company also thinks subscription revenue will accelerate as the year progresses and expects the enterprise base to expand. Management also stressed it still believes in the “long-term secular opportunity,” at play here, anticipating to “aggressively invest” not only in R&D, but also having “significant hiring plans” for 2022.

Shah anticipates the company will still be in investment mode beyond FY22 though not to the same degree, believing FY22 will likely represent the “margin trough.”

So, interesting times ahead for Matterport, but what does it all mean for investors? Shah reiterated a Buy rating, along with a $9 price target, suggesting shares will see 42% growth over the coming months. (To watch Shah’s track record, click here)

Shah’s forecast appears conservative when placed against his colleagues’ forecasts; the Street’s average target currently stands at $15.33, implying shares will appreciate ~142% over the one-year timeframe. All 6 recent reviews are positive, providing this stock with a Strong Buy consensus rating. (See Matterport stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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