Matterport (NASDAQ:MTTR) stock has not done well so far this year. Shares are down nearly 65% as the disruptive company loses steam, alongside the rest of the tech sector. But there was an interesting announcement recently that could help stem the tide.
Matterport is a 3D imaging company that partners with architects, homebuilders and real estate professionals to create 3D digital twins of any physical space.
3D models are becoming more popular because they provide the viewer with an immersive experience. They can be used in virtual reality or augmented reality to create an even more realistic experience.
The digital twin is a concept that has been around since the early 1990s, but it has recently been rebranded as the digital twin experience. It is a digitally-created representation of an object, and developers can use it in various industries such as healthcare, education, engineering, architecture and construction.
In the latest news, Matterport has released the Matterport Axis. It’s a motorized mount for smartphones that you can use with an iOS or Android device. The 3D digital twins are created using the Capture app and work very well with Matterport Capture software.
Whether it’s for financial reasons or simply because a company wants to find its place in the industry, Matterport has seen major losses in recent years and is looking for ways to increase its profit. Even though operating loss and net loss have widened in the last year, the company can absorb the losses because it has $670 million in its coffers. Nevertheless, it remains a risky, speculative play.
Is MTTR Stock a Buy, Sell or Hold
Matterport is one of the most interesting companies actively invested in the metaverse.
There has been an increased interest in using virtual worlds for educational and training purposes in the last few years. This interest led to the development of VR headsets that could simulate reality with high fidelity at affordable prices, making VR accessible to more people than ever before.
Several companies are becoming important in this new investment area and Matterport seeks to become one of them.
However, due to high losses, investors are losing interest. In addition, topline growth is also slowing. Although Matterport’s revenue grew by 87% in 2020, it increased 29% in 2021 to $111 million. By 2022, the company expects to generate revenues between $125 million and $135 million; estimated growth of 12% to 21%.
In 2021, the company was struggling to keep up with the increase in its expenses. There was a large operating and net loss, which led to further financial losses.
Despite the tremendous potential, MTTR stock is not a good buy. Losses are piling up, and growth will slow this year. If it finally starts posting some sustainable numbers, maybe a course reversal is possible. Until then, stay away.
On the publication date, Faizan Farooque 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.
