- Ark Invest recently bought into Matterport (MTTR)
- MTTR stock has been in freefall since December
- The star portfolio manager’s buy could be the signs of better things to come
The news that Ark Invest founder and Chief Investment Officer Cathie Wood bought almost 535,000 shares of Matterport (NASDAQ:MTTR) for one of her ETFs on March 28 had to be music to the ears of those holding MTTR stock.
Matterport’s share price has been under attack since early December. Over the past four months, it’s fallen by 75% to single digits. It entered the final month of 2021 at over $32.
Oh, how the mighty have fallen.
Wood believes that the metaverse and digital twinning will infiltrate every sector of the economy in ways we’ve yet even comprehend. In past articles about the company, I’ve written about property owners that already use Matterport’s technology here in Nova Scotia.
I don’t think there’s any question that Matterport’s got a bright future. The purchase by Ark Autonomous Technology & Robotics ETF (BATS:ARKQ) suggests that the worst might be over for MTTR stock.
The Uses for MTTR Digital Twinning Platform Are Limitless
As I stated in the intro, real estate owners use Matterport to do a better job of marketing their rental units to prospective tenants.
Inman.com published an article in early March discussing Matterport’s partnership with CAPTUR3D; a business focused on creating 3D home tours. It uses Sketchfab software to stage these digital versions of physical properties.
“We built Sketchfab with a mission to make 3D content more accessible, and our integration with CAPTUR3D and its Matterport-based solutions will empower creators with a wider reach for their content,” said Alban Denoyel, co-founder of Sketchfab, in the Matterport statement. “As the adoption of real-time 3D technology continues to increase, our vast online library has the ability to enhance digital twins and accelerate their evolution.”
For example, here’s a grand piano 3D model that you can buy to put in a nice digitally-twinned living space to make it look more inviting to prospective buyers. I imagine it would be cheaper than renting an actual grand piano. This Sketchfab integration gives you an idea of how the three work together.
As the company said in its March statement about the partnership, it’s added more than 150 partners to its Platform Partner program since launching it in 2021. CAPTUR3D is one of those partners.
As you can see, the applications for Matterport’s digital twinning technology are only limited by one’s lack of creativity.
MTTR Stock and Data Analytics
In early January, Matterport completed its acquisition of Enview for $35.5 million cash and the issuance of 1.59 million shares for a total value of $60.5 million.
Matteport acquired the company to accelerate the development of its next-generation spatial data analytics platform.
“Enview’s technology performs a variety of 3D spatial operations, including object recognition, feature extraction, feature-based change detection, 2D and 3D measurement and attribution,” Matteport’s Jan. 5 press release stated.
“The company’s Explore product is designed to democratize and automate the previously manual task of extracting insights from complex, sensor-fused 2D and 3D data.”
The company talks a lot about the datafication of buildings and structures. Enfield will help it take the 3D data accumulated through its digital twinning technology and turn it into value-added data analytics.
It’s one thing to twin a building digitally. It’s another to turn that data into valuable insights. I’m not sure investors understand the actual value of this information. It goes well beyond the cost of using its platform to twin a building digitally.
It occurs to me that the company itself might not even have a complete grasp of the potential benefits of what it’s doing. However, as Wedbush analyst said in October 2021, the company is just starting.
“Matterport has a ‘vast 3D-data library,’ which Ives calls unmatched in the industry. The company is mentioned as a play in the growing market and important for real estate and other sectors,” Benzinga reported in October.
“We continue to believe Matterport is in the early innings of a massive growth story playing out over the coming years.”
Under $10, MTTR Is an Aggressive Investors’ Dream Stock
Matterport currently has four revenue streams: Subscription (55% of revenue), Product (29%), Services (11%), and Licensing (5%).
In 2021, subscription revenues increased by 47%. I have to wonder what other subscriptions it will offer customers now that Enfield is a part of the company. The point is that Matterport has a lot of levers it can pull in the coming years to generate revenues.
I would not be shocked if its revenues accelerated in the years to come rather than slowed, as is usually the case with growth companies.
In 2021, Matterport grew subscription gross margins to 77%, a 400 basis point increase over 2020. Therefore, it will be profitable if it doubles this revenue in 2-3 years while maintaining or increasing its gross margin.
If you’re an aggressive investor, you’ve got to be buying at these prices, just as Cathie Wood did.
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.