Jul 6, 2022
[5 min Read]
You are probably aware that Matterport, Inc. (NASDAQ: MTTR) is a leader in the Software—Application space. In this analysis, we are going to look at some of the key financial ratios for Matterport, Inc. to determine a price prediction for MTTR. Remember these price predictions take into account several assumptions (which I will highlight) to determine a future price. I'll share my MTTR stock price prediction, then show you the approach and assumptions used to calculate the MTTR stock forecast.
Before we go any further, let me start by saying this, stock forecasting is hard. I don't know what the future will hold, and neither do Wall Street Analysts. If they could accurately predict the future, they would be able to beat the S&P 500 and I would be extremely wealthy. What I can say is that we can use available data to determine a reasonable MTTR stock forecast and helps us make better investment decisions, so hopefully, you find this analysis useful.
The Matterport, Inc. stock price prediction of $3.98 was derived from 3 main sources of data. I'll dive into the approach to show you how I determined how I “predicted” a stock price of $3.98 for MTTR
The Financial growth Metrics provide an analytics valuation approach to determining a reasonable MTTR stock forecast. The other two sources of data will be used to adjust the stock price prediction for MTTR. Let's be honest, if you've ever done a valuation exercise on a stock or tried to determine the future price, it is both an art and a science.
You might be thinking, "how does it make sense that you arrived at a MTTR stock forecast for 2025 of $4.15, but the metrics indicate that it is actually $3.98?" Well, as you will see later, there is a MTTR comparable analysis which also has it's own (separate) price forecast. So make sure you stay tuned for that.
For this part of the analysis, I am looking at the history of key financial metrics for Matterport, Inc. to forecast the stock into 2022 and 2025. Most investors know that historical performance does not guarantee future performance, but it is useful to see how MTTR has been trending.
MTTR has experienced a 3 Year Earnings Per Share (EPS) growth of 0%. Let's assume that MTTR can continue to grow Revenue and Earnings at a similar rate for the next three years, then we can assume the MTTR stock forecast for 2025 will follow a similar growth trajectory. I recognize there are a lot of other factors but this is a straightforward and solid approach.
With MTTR Earnings Per Share of -1.02 projected out at the 3-year growth rate gives us a future EPS of -1.02. If the current MTTR Price to Earnings Ratio is -3.89 (and we assume this remains the same) then we determine the MTTR stock forecast by multiple the P/E by the EPS to give us a stock price prediction of $3.98 per share
There are other ways to predict the price for MTTR but I would argue that P/E, EPS, and Earnings Growth are the most commonly used financial metrics by analysts and investors. This is why I used them to forecast MTTR's stock price.
Analyst Ratings have provided relatively strong indicators of future price movement, which is why they are used to determine a MTTR stock forecast. It can also help you decide whether you should buy or sell MTTR There are a total of 19 analyst ratings for MTTR. Here is the current breakdown of analyst ratings:
As you can see, the overwhelming majority of analysts have given the MTTR stock a "buy" rating. This indicates that they are bullish on the MTTR stock and they think that it is either at or below its fair market value. This is good information to know, however, you should not base your investment strategies solely on analyst ratings. Make sure you have done the research and have determined that the MTTR stock is a buy in your eyes before factoring in these ratings as they should serve as a confirmation of previously achieved ideas rather than an indicator.
Overall, by taking an average of the results achieved by the P/B and EV/Sales comparable analyses, we can determine a MTTR stock forecast for 2025. By doing this, we estimate that the MTTR stock is currently undervalued and needs to increase in value by 12.22% in order to be at fair value. If this were to happen, it would mean that the MTTR stock would be trading at $4.32.
Should you buy MTTR? Well, based on the MTTR stock forecast of $4.15/share, analysts being overwhelmingly bullish, and the current price of the MTTR stock being $3.85, I would agree with the analysts and say MTTR is a buy.
Based on my 2 main valuation methods, I arrived at a MTTR stock forecast for 2025 of $4.15/share, which indicates an upside potential of 7.8%.