There is a very intriguing narrative underpinning investment in Matterport (NASDAQ:MTTR) stock. It all has to do with the metaverse and identifying those companies that will be integral to its construction.
There’s every reason to believe Matterport has a great chance of establishing itself as a central figure in that construction.
In fact, given Matterport’s relatively long history with Meta Platforms (NASDAQ:FB), it arguably has among the best chances. That’s because Matterport and Meta announced in June that the two companies were working together. Matterport is building thousands of digital twins of real spaces for Facebook researchers to study and to apply their AI.
Understanding Matterport’s digital twin technology is the best place to start in understanding why this company could explode. But before that, it’s necessary to also understand what the metaverse itself is.
Metaverse
The metaverse is a combination of the prefix ‘meta’, meaning self referential, and ‘verse’, short for universe. As envisioned by Meta, the Facebook rebrand, the metaverse is, “A set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you. You’ll be able to hang out with friends, work, play, learn, shop, create and more.”
Whether Meta’s definition of the metaverse fully comes to fruition remains to be seen. Regardless, it will comprise virtual spaces that will need to be built. That’s where Matterport comes in.
Digital Twin Tech
We’ve already established that Matterport and Meta are working together to create digital twins that Meta AI researchers will use to understand how to construct the metaverse.
Matterport describes its technology thusly: “A digital twin is a digital copy of a real-world place or object. Artificial intelligence and machine learning technologies enable the creation of digital twins, which are dimensionally accurate 3D digital models that can be updated quickly to reflect changes with its physical counterpart.”
That’s probably not very surprising they’re working together. I think the interesting thing though is to see the detail in the early mapping of the images produced.
Big Claims Make Sense
Matterport bills its technology as “the most accurate virtual 3D model of a real place – whether it be a room, an entire building, or an outdoor space.” That assertion certainly seems to have some credence given that Meta identified the company and chose to work with them early this summer.
There’s zero chance that Meta made a flippant choice in partnering with Matterport for such an important move.
Facebook, or Meta, arguably has the most to lose of the tech giants in pursuing the metaverse. It made a bold move with its rebrand, and if things go wrong, that first-mover advantage becomes a big-time problem.
Matterport is an interesting company central to the early metaverse. That alone doesn’t mean investors should throw money at MTTR stock though. To understand whether that makes sense, let’s look at recent earnings and a recent announcement.
I believe those two factors make it worthy of strong consideration.
MTTR Stock Earnings
Matterport boasts 439,000 subscribers as of its latest earnings report. That’s an increase of 116% compared to the same period a year earlier. The company also reports 6.2 million spaces under management, a 62% increase over a year earlier.
The company made $27.7 million in sales in Q3. It anticipates $62.7 in recurring revenue annually. And importantly, Matterport added more than $600 million to its balance sheet in the quarter after coming public via a merger with Gores Holdings.
The other news of note is that Matterport is working hard to scale up the name it has built for itself. The company has expanded its capture on demand services by 55%. That means more customers can now schedule to have a Matterport capture technician digitize their spaces than before.
It’s hard to argue against investing in Matterport at this time even though it’s past its target price currently.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
