Earnings Release: Here's Why Analysts Cut Their Matterport, Inc. (NASDAQ:MTTR) Price Target To US$3.75
It's been a mediocre week for Matterport, Inc. (NASDAQ:MTTR) shareholders, with the stock dropping 16% to US$2.07 in the week since its latest full-year results. Revenues came in at US$158m, in line with forecasts and the company reported a statutory loss of US$0.66 per share, roughly in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Matterport after the latest results.
See our latest analysis for Matterport
Following the latest results, Matterport's seven analysts are now forecasting revenues of US$176.4m in 2024. This would be a solid 12% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 24% to US$0.49. Before this earnings announcement, the analysts had been modelling revenues of US$177.7m and losses of US$0.53 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The consensus price target fell 15% to US$3.75despite the forecast for smaller losses next year. It looks like the ongoing lack of profitability is starting to weigh on valuations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Matterport, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$2.75 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Matterport's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like Matterport is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Matterport going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Matterport , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
