MatterportMTTR7,08 $
Matterport (NASDAQ: MTTR) is an American technology company, engaged in the digitalization of data from the real world. Its quotes are favored by investor interest in the poorly understood topic of the metaverse., and its business - real demand from the corporate sector. Let's figure it out, is the foundation of this company's business strong?.
When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.
What do they earn
MTTR digitizes physical spaces to create maps, simulations of physical spaces and objects in virtual space. But, as Heraclitus said, “eyes are more accurate witnesses, rather than ears": better look video companies, to understand, what exactly it offers.
It all works on the engine, which uses the power of machine learning and artificial intelligence (II). You can scan spaces with its software using special devices, as well as apps for Android and iOS.
The company's annual report is rich in technical details., also there is more or less detailed coverage of the company's business. Based on 2021 data, The company's revenue is divided into the following segments.
Subscription — 55%. The company's customers and individuals pay it to access its platform. Segment gross margin — 76,22% from its proceeds.
Licenses — 4%. In this segment, MTTR provides access to data from its platform to third-party customers. Segment gross margin — 100% from its proceeds, because the company does not incur costs in the process of selling these services.
Goods — 29%. Device Sales, necessary for digitization of physical objects. It counts as Matterport-branded products like the Pro2 3D Camera., and third party devices. Devices under the MTTR brand are assembled from components, produced by third-party enterprises. Segment gross margin — 18,88% from its proceeds.
Services — 12%. In this segment, the company is engaged in the digitization of objects by order of customers, and also receives revenue from the sale of services in its application. Segment gross margin — 20,3% from its proceeds.
The company's solutions are applied in many sectors: hospitality, globetrotting, commercial real estate, projection, - but they are invariably related to object management.
The company's revenue by country and region is divided as follows: USA - 60,75%, and 39,25% - other, unnamed countries.
Recently entered the MTTR exchange, in July 2021, years by merging with SPAC.
The company is horribly unprofitable: her total loss is 3 times the revenue, and operational - "only" in 1,5 Times.
Arguments in favor of the company
A little. In absolute numbers, the company is inexpensive: its capitalization is about 1.95 billion. This will make its quotes very sensitive to the influx of investors..
Metaverse! The concept of the metaverse excites the minds of investors and even leads to a change in the name and trajectory of the development of technological giants. Nobody really understands yet, How can this be applied in the commercial field?, but, Considering, that hundreds of millions of dollars are already being spent on buying virtual items in virtual worlds, and on views, how other people play, literally thousands of years have passed, I think, that investor interest in MTTR shares will be very high.
What does MTTR have to do with this: she is considered among financial observers as the purest representative of the metaverse theme and is constantly taken into account in thematic selections. Therefore, in the event of a new rise in investor interest in this topic, MTTR shares will get something.
It seems promising. Tales about the metaverse are still stories for programmers, whom nosy start-ups rush to get rid of excess money.
And in the real world, MTTR solutions can be of great practical value to both builders., as well as for management companies: the presence of a detailed interactive map of buildings greatly facilitates the task of how to repair, as well as alterations or additions. According to MTTR, only 0,1% buildings in the world with a total value of 228 trillion dollars digitized. So there's a lot of work to be done..
But in general, MTTR solutions can find application - and most likely will find - in a variety of industries., including manufacturing and oil and gas sector.
As a matter of fact, MTTR is another front for automating the economy. Its interactive digital maps significantly increase the manageability of processes in real estate.
The company has a nice promotional flyer in the form of a presentation., where she, in principle, correctly lists the scope of her decisions - and the benefits, that its software can bring:
- for repairers, its cards allow to reduce the time of inspection of the object;
- cards allow insurers to receive more accurate information about the object and reduce associated risks;
- in the corporate stall at the office team management level, MTTR solutions simplify monitoring and help you get more out of your workforce.
Here is a typical case of MTTR: thanks to her solutions, the construction company Gilbane reduced the time of work on the project by 25-30%.
Diversification. The largest 10 the company's customers collectively give it less 10% proceeds. This eliminates the risk of a drop in Matterport's revenue in the event of a large client leaving..
There is progress. In the last quarter, the subscription gave already 61% company revenue, and the gross margin of this segment was 78% from its proceeds. The share of the most marginal subscription segment will continue to grow, and in the long run it will pay off: the company can get a margin business with a stable cash flow.
There is room to grow. The company is quite sober about its target market and its capabilities.: 4 billion buildings and 200 billion rooms. If she charges a dollar a month for a room she works on, and takes only 1% from this amount, then its stable renewable revenue will be at least $2.4 billion per year.
Can buy. With all of the above in mind, as well as the growing popularity of the idea of augmented and virtual reality, the company may well be bought by one of the major technology giants like Apple or Google.
Premises, available for digitization in different countries, million square meters
| Canada | 96 |
| USA | 935 |
| Brazil | 540 |
| United Kingdom | 173 |
| Germany | 214 |
| France | 176 |
| China | 3700 |
| India | 3500 |
| Japan | 324 |
| Australia | 64 |
96
What can get in the way
Freeloaders. The company has a free version of its software, And, Unfortunately, most of its users use free features. Alarming fact, that the number of free users at the company more than doubled last year, but the number of paid subscribers increased only by 25%.
Certainly, looking at the general state of affairs, then it's not so bad: paying subscribers make up 10,93% of the total number of subscribers. But, considering the unprofitableness of the company, I would like to see a large growth rate here, than there is.
Audience of the company, thousands of people
| 4к2020 | 4к2021 | |
|---|---|---|
| Total number of users | 254 | 503 |
| Paid subscription | 44 | 55 |
Insane price. Company P / S 31,71, which is too much even considering its prospects. Considering, that she is unprofitable, quotes will definitely storm.
Promising, but not now. The company periodically reviews downward revenue forecasts, and they don't grow as well, as we would like, but for a startup it's like death. There are several reasons for the slowdown in revenue growth..
The first and most obvious: logistical difficulties, which prevent companies from getting both their devices, and partner devices. This segment accounts for just under a third of revenue., and I suspect, that among users of special devices, the conversion into paying subscribers and consumers of services is much higher, than among those, who uses the smartphone version of MTTR.
A similar principle applies to Roku.: it also sells its services and solutions primarily to buyers of its devices. Considering, how important China is in the production chains of MTTR and its partners, i would expect, that this problem will affect the company's reporting for a couple more quarters.
The second point is implicit, And, frankly,, this is my hypothesis. The pandemic has severely crippled the commercial real estate sector due to the exodus of the population from cities to the suburbs - offices do not give up and investment in this area is falling, which indirectly causes a slowdown in orders for MTTR services.
In the residential real estate segment, the adoption of MTTR technologies is hampered by high demand and marginality: so far, realtors and homebuilders are satisfied with that, how quickly houses fly away from the market. While there is no point in actively bothering with digitalization.
But in commercial real estate, software reception has great potential, but so far this sector is stuck in timelessness. On the one side, investments in this area have fallen, and on the other, over the two years of the pandemic, far from all rentiers have lost hope that, that "everything will be as before". And while they are in no hurry to increase investment in software in order to, to make the most of their scarce resources. This, certainly, Change, because "as before" will no longer be in our lifetime.
Understandably, that in both segments MTTR technology will be very actively adopted in the future, but so far this future has not come. AND, Unfortunately, its slow offensive will anger investors.
SPAC. The genesis of the company is alarming: may be, MTTR, like some other SPAC, does not tell the whole truth about himself to investors. I wrote about these kinds of risks in detail in my SPAC article..
Resume
MTTR reminds me a lot of Procore: interesting and useful solution, the most for the still poorly digitalized and needing to increase the productivity of the real estate sector. And the same inadequate cost.
Therefore, I would wait for the stock to fall at least one and a half to two times.. Although I won't rule out, that they can now grow on the speculative interest of investors or some Apple will buy the company at the current price.
