Earnings Release: Here's Why Analysts Cut Their Matterport, Inc. (NASDAQ:MTTR) Price Target To US$3.75

There's been a notable change in appetite for Matterport, Inc. (NASDAQ:MTTR) shares in the week since its annual report, with the stock down 16% to US$2.07. The results overall were pretty much dead in line with analyst forecasts; revenues were US$158m and statutory losses were US$0.66 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Matterport

Taking into account the latest results, the current consensus from Matterport's seven analysts is for revenues of US$176.4m in 2024. This would reflect a decent 12% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 24% to US$0.49. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$177.7m and losses of US$0.53 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 15% to US$3.75. It looks likethe analysts have become less optimistic about the overall business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Matterport, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$2.75 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Matterport's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last three years. Compare this to the 437 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it looks like Matterport is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Matterport. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Matterport going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Matterport .

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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.