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LTCH

Latch NasdaqGS:LTCH Stock Report

Last Price

US$1.30

Market Cap

US$188.3m

7D

19.3%

1Y

-86.9%

Updated

12 Aug, 2022

Data

Company Financials +
LTCH fundamental analysis
Snowflake Score
Valuation1/6
Future Growth2/6
Past Performance0/6
Financial Health5/6
Dividends0/6

LTCH Stock Overview

Latch, Inc. operates as an enterprise technology company in the United States and Canada.

Latch Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Latch
Historical stock prices
Current Share PriceUS$1.30
52 Week HighUS$14.83
52 Week LowUS$0.99
Beta0
1 Month Change3.18%
3 Month Change-48.21%
1 Year Change-86.91%
3 Year Changen/a
5 Year Changen/a
Change since IPO-87.15%

Recent News & Updates

Jul 03

Making Buildings More Secure Is Leaving Latch Poorer

Latch is growing quickly, but at a significant cost. The company's cash burn is quickly consuming existing cash and equivalents. With Latch servicing just one percent of the market for access control and building software, growth should continue to be strong. Proptech firm Latch (LTCH) helps buildings become more secure. The company does this through a smart access system named LatchOS, a combination of hardware and software that manages who gains access to a building. With revenue for the New York-based company rapidly ramping, its bulls argue that Latch is opening up clear market leadership on the back of a strong technology stack. With LatchOS being used in more than 1 in 10 newly built U.S. apartments, this argument likely rings true. The company counts many large real estate development firms as partners, including AvalonBay (AVB), Brookfield (BAM), and Toll Brothers (TOL). The market for access control and building software is growing, with a number of public firms like SmartRent (SMRT) and private startups such as Dwelo and BeHome247 all competing for market share. Latch's management has placed this market at $54 billion in the United States, with an estimated 47 million rental homes. With LatchOS currently serving less than one per cent of this figure, the company's management has guided for significant revenue growth ahead. An ambition to fully capitalize on this market drove the company to go public in June 2021 with a merger with a Tishman Speyer blank check company. The transaction was completed at a $1.56 billion valuation, and Latch raised gross proceeds of $453 million from a long investor list that included Social Capital's Chamath Palihapitiya. Data by YCharts Latch's common share prices have since collapsed by 92% as growth stocks fell alongside a market pullback of historic proportions. Inflation running at multi-decade highs has forced the FED to become extremely hawkish in their roadmap for raising interest rates, bringing an end to an era of cheap liquidity. However, with Latch recording revenue of just $13.7 million for its last reported earnings period, its go-public valuation of $1.56 billion was always a stretch. Bears point to the extreme euphoria and excess of the SPAC market boom of early 2021, when Latch initially announced it would go public, as a critical factor in embedding overly optimistic revenue multiples to technology-related upstarts. The good times were never meant to last, hence Latch's public adventure presented an inherent exit for its private investors and a terrible deal for its early public backers. Cash Burn Rising As Revenue Ramps The company last released earnings for its fiscal 2022 first quarter, which saw total revenue come in at $13.7 million, a 106% increase from the year-ago period but a miss by $350,000 on consensus estimates. Software accounted for 22% of total revenue and grew by 88% year-over-year, as annual recurring revenue grew by 137% to reach $7.9 million. Latch Inc The company sees hardware sales as a loss-leader for higher-margin software sales. Indeed, sales of its physical locks were completed at a -21% gross margin during the quarter, compared to a gross margin of 89% for its software sales. However, and perhaps most alarming, net loss for the period grew to reach $44.2 million, up from $38.1 million in the year-ago quarter. This came as operating expenses grew by 61.5% from its year-ago figure. Negative free cash flow during the quarter was at $44.5 million, up from a cash burn of $14.6 million in the comparable year-ago period. This meant cash and equivalents continued its decline, reaching $264 million at the end of the quarter. With no real debt on its balance sheet, Latch's enterprise value stands at -$100 million, materially lower than its current market cap of $163.73 million. A negative enterprise value is rare and highlights just how much sentiment towards the company's stock has collapsed.

Shareholder Returns

LTCHUS SoftwareUS Market
7D19.3%-0.9%1.3%
1Y-86.9%-16.6%-11.7%

Return vs Industry: LTCH underperformed the US Software industry which returned -16.6% over the past year.

Return vs Market: LTCH underperformed the US Market which returned -11.7% over the past year.

Price Volatility

Is LTCH's price volatile compared to industry and market?
LTCH volatility
LTCH Average Weekly Movement11.7%
Software Industry Average Movement10.5%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: LTCH is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: LTCH's weekly volatility (12%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
n/a440Luke Schoenfelderhttps://www.latch.com

Latch, Inc. operates as an enterprise technology company in the United States and Canada. The company offers LatchOS, an operating system that extends smart access, delivery and guest management, smart home and sensors, connectivity, and personalization and services. Its software products include Latch Resident Mobile Applications, Latch Manager Web, and the Latch Manager Mobile Applications.

Latch Fundamentals Summary

How do Latch's earnings and revenue compare to its market cap?
LTCH fundamental statistics
Market CapUS$188.27m
Earnings (TTM)-US$172.45m
Revenue (TTM)US$48.39m

3.9x

P/S Ratio

-1.1x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LTCH income statement (TTM)
RevenueUS$48.39m
Cost of RevenueUS$50.91m
Gross Profit-US$2.52m
Other ExpensesUS$169.93m
Earnings-US$172.45m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-1.19
Gross Margin-5.21%
Net Profit Margin-356.40%
Debt/Equity Ratio0.7%

How did LTCH perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is LTCH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LTCH?

Other financial metrics that can be useful for relative valuation.

LTCH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ration/a

Price to Sales Ratio vs Peers

How does LTCH's PS Ratio compare to its peers?

LTCH PS Ratio vs Peers
The above table shows the PS ratio for LTCH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average3.1x
PHUN Phunware
8.4x24.1%US$167.3m
SMSI Smith Micro Software
2.3x27.4%US$131.6m
RAAS Cloopen Group Holding
1x32.5%US$154.3m
SNCR Synchronoss Technologies
0.6x3.0%US$152.3m
LTCH Latch
3.9x39.8%US$188.3m

Price-To-Sales vs Peers: LTCH is expensive based on its Price-To-Sales Ratio (3.9x) compared to the peer average (3.1x).


Price to Earnings Ratio vs Industry

How does LTCH's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Sales vs Industry: LTCH is good value based on its Price-To-Sales Ratio (3.9x) compared to the US Software industry average (5.3x)


Price to Sales Ratio vs Fair Ratio

What is LTCH's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LTCH PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio3.9x
Fair PS Ratio1.8x

Price-To-Sales vs Fair Ratio: LTCH is expensive based on its Price-To-Sales Ratio (3.9x) compared to the estimated Fair Price-To-Sales Ratio (1.8x).


Share Price vs Fair Value

What is the Fair Price of LTCH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: Insufficient data to calculate LTCH's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate LTCH's fair value for valuation analysis.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


Discover undervalued companies

Future Growth

How is Latch forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


27.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LTCH is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: LTCH is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: LTCH is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: LTCH's revenue (39.8% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: LTCH's revenue (39.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LTCH is forecast to be unprofitable in 3 years.


Discover growth companies

Past Performance

How has Latch performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-95.6%

Last years earnings growth

Earnings and Revenue History

Quality Earnings: LTCH is currently unprofitable.

Growing Profit Margin: LTCH is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if LTCH's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Unable to compare LTCH's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: LTCH is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (18.7%).


Return on Equity

High ROE: LTCH has a negative Return on Equity (-50.37%), as it is currently unprofitable.


Discover strong past performing companies

Financial Health

How is Latch's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: LTCH's short term assets ($324.0M) exceed its short term liabilities ($40.6M).

Long Term Liabilities: LTCH's short term assets ($324.0M) exceed its long term liabilities ($32.2M).


Debt to Equity History and Analysis

Debt Level: LTCH has more cash than its total debt.

Reducing Debt: Insufficient data to determine if LTCH's debt to equity ratio has reduced over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: LTCH has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: LTCH has sufficient cash runway for more than 3 years if free cash flow continues to reduce at historical rates of 46.5% each year


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Dividend

What is Latch current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate LTCH's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LTCH's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LTCH's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LTCH's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as LTCH has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

0.4yrs

Average management tenure


CEO

Luke Schoenfelder (32 yo)

no data

Tenure

US$402,053

Compensation

Mr. Luke Andrew Schoenfelder serves as Chief Executive Officer at Latch, Inc. and has been its Chairman of the Board since June 2021. Mr. Schoenfelder is Co-Founder of Latch, Inc. From launching Latch’s fi...


CEO Compensation Analysis

Compensation vs Market: Luke's total compensation ($USD402.05K) is below average for companies of similar size in the US market ($USD1.66M).

Compensation vs Earnings: Luke's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: LTCH's management team is not considered experienced ( 0.4 years average tenure), which suggests a new team.


Board Members

Experienced Board: LTCH's board of directors are not considered experienced ( 1.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.5%.


Top Shareholders

Company Information

Latch, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Latch, Inc.
  • Ticker: LTCH
  • Exchange: NasdaqGS
  • Founded: NaN
  • Industry: Application Software
  • Sector: Software
  • Implied Market Cap: US$188.266m
  • Shares outstanding: 144.82m
  • Website: https://www.latch.com

Number of Employees


Location

  • Latch, Inc.
  • 508 West 26th Street
  • Suite 6G
  • New York
  • New York
  • 10001
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/12 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.