I had the pleasure of writing about Matterport (NASDAQ:MTTR) stock on two occasions in December. Unfortunately, despite the technology company’s digital twinning spatial data platform accomplishing minor miracles, investors fled Matterport by the busload.
When I first wrote about Matterport on Dec. 13, I recommended that if you could buy MTTR stock below $20, you absolutely should. In the month since it’s lost 33% of value.
Before you chuck Matterport from your watchlist, you might want to consider these three reasons to buy its stock.
MTTR Stock and Alec Gores
As I stated in my Dec. 13 article, I expect Alec Gores, the chairman of The Gores Group and sponsor of the special purpose acquisition company that merged with Matterport, will make a significant amount of money from tying his wagon to the California tech company.
“[I]f you can get MTTR stock in the teens, you should run, not walk, to buy some. For those who are looking to hold onto the shares for three to five years, I think that you will make a significant amount of money by buying them at their current levels,” I wrote in December.
“That said, you can expect the shares to be quite volatile in 2022. So make sure to put aside some funds to buy the name under $20.”
If you’re an aggressive investor, I don’t think anything’s changed about the company in the past month to justify a 33% haircut. However, a few recent news items should give shareholders a dollop of optimism early in 2022.
Ultimately, Alec Gores association with Matterport makes it a better buy than many of the de-SPACs completed in the second half of 2021.
A Small But Useful Acquisition
Matterport announced on Jan. 6 that it had completed its acquisition of Enview, a San Diego-based company with a 3D artificial intelligence automation platform that helps companies, governments, and organizations make sense of their 3D data.
The acquisition wasn’t a big one. Matterport paid $35.5 million in cash while issuing 1.59 million shares of Matterport stock. Based on the share price as I write this, Enview cost the company $60.3 million. Down significantly from its late November high of $37.60, the deal still only represents less than 2% of its market capitalization.
While it might not be material to the company today, Enview’s contribution to Matterport’s future will be significant.
“Joining Matterport provides a unique opportunity to pair our leading 3D AI technology with Matterport’s rich spatial data to provide new levels of datafication and insight to customers around the world,” said San Gunawardana, Enview’s co-founder and CEO. “We could not have asked for a better company to partner with to extend our work and build a world-class analytics platform for customers to increase the value of every one of the world’s 4 billion buildings.”
Uniting both companies under one roof provides customers with a futuristic platform that will enable them to make better and faster decisions.
The company’s total addressable market is approximately $1.2 trillion. And while businesses love to throw out big numbers when discussing the future, the global real estate sector is massive. The use cases for its AI platform are tremendous.
The acquisition should add value to its platform.
Matterport Gets 2 Awards
In December, Matterport won two Comparably Awards. It won for best company culture and best company for women. Comparably would best be described as an employer-friendly competitor to Glassdoor.
The “Best Company for Women” award is based on responses from Matterport’s female employees based on 50 questions across 20 core culture metrics. The sentiment ratings were collected between November 2020 and November 2021.
“As our team of Matterpeeps continues to grow, promoting our employees’ quality of life and ensuring that Matterport is a place where women can thrive have remained top priorities,” said Jean Barbagelata, Matterport’s chief people officer. “These awards feel particularly meaningful because they are based on feedback from our own people. We’re proud to hear that our employees, of which 40 per cent are female, feel empowered and connected, even during a global pandemic.”
I don’t know about you, but the fact 40% of Matterport’s employees are women suggests to me that the male stereotype in technology is slowly starting to fade away. That’s an excellent thing for the tech industry. And it’s ideal for Matterport shareholders because the companies that win in 2022 and beyond will be women-friendly.
The Bottom Line
I feel good about Matterport’s chances in 2022. By the end of this year, its first full year as a public company, I see investors becoming a lot more familiar with its technology and its part in successfully managing buildings around the world.
Before the pandemic, my wife worked in retail management, traveling significantly to stores throughout Canada and the U.S. I could never understand why managers had to visit stores so much when technology could solve the problem of excessive store visits and travel burnout.
Browse this Original Penguin store to get an idea: https://matterport.com/gallery#
Anyway, as I see it, Matterport continues to push to be a part of the solution rather than the problem.
Under $20, it remains an excellent long-term buy for aggressive tech investors.
On the date of publication, Will Ashworth 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.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.