There's been a major selloff in Matterport, Inc. (NASDAQ:MTTR) shares in the week since it released its quarterly report, with the stock down 23% to US$4.34. It was overall a positive result, with revenues beating expectations by 3.8% to hit US$29m. Matterport also reported a statutory profit of US$0.23, which was a nice improvement from the loss that the analysts were predicting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Matterport after the latest results.
Following the latest results, Matterport's seven analysts are now forecasting revenues of US$129.2m in 2022. This would be a decent 15% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$1.37 per share. Before this earnings announcement, the analysts had been modelling revenues of US$129.2m and losses of US$1.37 per share in 2022.
As a result, it's unexpected to see that the consensus price target fell 11% to US$9.00, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Matterport, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$6.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Matterport's growth to accelerate, with the forecast 20% annualised growth to the end of 2022 ranking favourably alongside historical growth of 13% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Matterport is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Matterport's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Matterport analysts - going out to 2024, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Matterport that we have uncovered.
What are the risks and opportunities for Matterport?
Revenue is forecast to grow 11.52% per year
Shareholders have been diluted in the past year
Significant insider selling over the past 3 months
Currently unprofitable and not forecast to become profitable over the next 3 years
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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.