What Does WM Technology, Inc.'s (NASDAQ:MAPS) Share Price Indicate?

WM Technology, Inc. (NASDAQ:MAPS), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on WM Technology’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for WM Technology

What Is WM Technology Worth?

Good news, investors! WM Technology is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 3.68x is currently well-below the industry average of 41.96x, meaning that it is trading at a cheaper price relative to its peers. Another thing to keep in mind is that WM Technology’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will WM Technology generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for WM Technology, at least in the near future.

What This Means For You

Are you a shareholder? Although MAPS is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to MAPS, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on MAPS for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, WM Technology has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you are no longer interested in WM Technology, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for WM Technology?

NasdaqGS:MAPS

WM Technology

WM Technology, Inc. provides ecommerce and compliance software solutions to retailers and brands in cannabis market in the United States and internationally.Show more

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Rewards

• Trading at 80% below our estimate of its fair value

• Earnings are forecast to grow 42.98% per year

Risks

• Highly volatile share price over the past 3 months

View all Risks and Rewards

Share Price

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1Y Return

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.