$MTTR - Matterport Stock Analysis:
On October 28th 2021, Facebook announced that they are changing the company name of their parent company (formerly “Facebook”) to “Meta”, and that their stock will be changing from “FB” to “MVRS”. This move was in large part due to the privacy backlash Facebook has been getting, which will help them get somewhat of a “fresh start”. Additionally, this change also signals Facebook's commitment to building a “Metaverse” which will be in large part built with VR and AR technologies.
This announcement sent ripples in the investment space, especially among retail investors. Since this announcement we have seen smaller cap “Metaverse” cryptocurrencies skyrocket well over 100%. However, this was just the initial reaction, and this hysteria is starting to make its way into the stock market, propelling “Metaverse” stocks to decent gains. This is especially true for smaller cap “Metaverse” stocks like Matterport, which has increased by over 30% since the announcement on October 28th.
Matterport Company Information:
Matterport is a spatial data company that digitalizes and indexes various types of buildings. Matterport has their own 3D data platform that is able to turn any real-life indoor space(s) into an accurate digital replica. This identical virtual space can be used to build operate, promote, and understand the space (this will be discussed later).
Matterport has over 150 commercial clients that range from start-ups to Fortune 500 companies. Additionally, Matterport has scanned/replicated 10B square feet of indoor spaces over 150+ countries.
Matterport has listed some cases in which their services provided large benefits for their commercial clients in the following categories. As you will see, Matterport has been vary useful for their clients, helping them to increase revenues, save time, and save money. Furthermore, these cases show how versatile Matterport's service is, and how wide their potential use cases span.
Matterport helped Corgan to reduce their time of capturing by over 50%, helping them to gain efficiency and validation. Furthermore, by using Matterport it is estimated that their costs were reduced by a factor of 20x. This was a large project for Matterport, scanning over 18,000 square feet, helping them to prove they are the best option for cost/efficiency for large area scanning.
Matterport helped HH Angus to gain efficiencies in their Building Information Modelling processes. This helped HH Angus to experience large savings in both time (50% reduction in time capturing spaces), and money (50% reduction in cost for surveys). This was another large project for Matterport, scanning 17,500 square feet of space, which helps to prove that Matterport is consistent in their time savings for larger projects.
Amy Kite has been using Matterport to scan the homes that she is listing on the real estate market in Chicago. By using Matterport Amy was able to create a unique, informative, and interactive environments that engage online clients. Success for Amy came quickly as her time-on-page for her online listings increased by 100%, which helped her to reduce the time her listings stayed on the market by 50%. Furthermore, it reduced the time for photography/scanning by 90%, which helped Amy incur additional savings.
Chicago Water & Fire Restoration wanted to streamline documentation for claims. They realized that their traditional methods would not work, so they partnered with Matterport, which has proven to be a great decision. Matterport helped them to increase their accountability, customer service, and quality assurance. This translated into a 5-7% increase in revenues, a 10% workflow capacity increase, and a decreased number of claims (potentially false claims).
There has been a lot of hype around Matterport ever since Facebook switched their name to “Meta” and has released their plans for the Metaverse. Currently, this is all just speculation, and all of this has had a large impact on the $MTTR stock (up 30% in the past 4 trading days).
However, Matterport is a leader in the 3D scanning and spatial data industry, so it would make sense if Matterport has some role to play in the creation of a Metaverse. Furthermore, on June 30th, 2021, Matterport and Facebook collaborated on realistic virtual environments for AI. This is good news for the speculators, as there is already some history between the companies, and they are familiar with each others' services.
If Matterport becomes the most influential/responsible company for helping to create the Metaverse, their business and their stock should do extremely well. This is especially the case if/when the Metaverse is widely accepted as Matterport will be able to scan in real life buildings which can have many use cases.
Matterport would be a great company for Facebook to collaborate with on the Metaverse, as Matterport already has 10B square feet of indoor spaces scanned. Additionally, Matterport is very efficient in their scanning and will be able to add to this quicker than many other special data companies, making Matterport even more of an obvious choice.
One potential use for Matterport in the Metaverse would be scanning tourist sites. For an example, Matterport could scan the Louvre Museum and create a way that people can virtually tour the Louvre in the Metaverse. This deal would most likely bring in recurring revenues for Matterport, as the Louvre will be able to charge for tickets, and Matterport will be able to essentially charge “virtual rent” for Louvre to keep their virtual museum up and have constant updates so people can see new exhibits.
Matterport 3D Camera App:
As previously stated, Matterport has over 10B square feet of indoor space mapped. This number has increased very quickly over the past 6 months as Matterport rolled out their App on the IOS App Store, and more recently on the Android App Store. These releases have been vital in building Matterport's valuable spatial database. Furthermore, the release of the Matterport app on Android (on October 28th, 2021 (same day as Facebooks name change to “Meta”)) should help Matterport to further expand their database of spatial data.
Matterport is able to greatly expand their spatial databases shortly after their app launch as they offer a “first scan free promotion”. This allows customers (both individual and enterprise) to test out their mobile version free of charge to get familiar with their app and perhaps choose to continue with a paid version. This launch allows Matterport to acquire customers at a low cost, while expanding their spatial database very quickly. Promotions like these will enable Matterport to build some of the biggest spatial databases in the world which will be insanely valuable if the Metaverse is widely integrated.
This app is also very useful for Matterport's commercial clients who need to scan multiple different places/facilities across different regions/countries. This is due to the fact that they do not have to order multiple Matterport camera's and ship them to the spaces that thy need scanned. Rather, they can choose 1 employee/manager to make the scan on a given day. This can reduce the time to scan let's say 100 buildings from 100+ days to less than a day.
Currently, Matterport works well with phone scans, however “Matterport's” in-house cameras provide superior quality and are more useful for enterprises who need a high degree of accuracy. However, the developments in camera technology in mobile phones over the past decade have been immense, and as this development continues, Matterport's mobile scanning technology will only work better.
In order to value $MTTR I could only undergo a DCF model. This is because $MTTR does not currently yield any dividends, and they have limited financial information and ratios. Furthermore, I used information from Matterport's Investor presentation in order to project their revenues. Since these figures come from Matterport, they may be a little biased.
As you can see in my DCF model, the fair value for $MTTR is $30/share, which implies an upside of over 20%.
Matterport is releasing their Q3 2021 earnings on November 3rd, 2021. This has the potential to be a huge catalyst for Matterport stock, as it is their first earnings report since going public on July 23rd, 2021.
PIPE Lock-Up Expiration:
In their SEC filings, Matterport notes the fact that their PIPE investors can sell as early as 180 after the completion of the merger. This means that the lock-up will expire on January 19th, 2022, and investors should expect a large sell off on this date (10-20% is likely).