Matterport (GHVI)

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I’m a 14-year-old individual investor, and this is my first post on the Motley Fool. Here’s my writeup on Matterport (GHVI) and I welcome your feedback.

Gores Holding Six (GHVI), better known as Matterport, is ringing in the new virtual age. Matterport provides cameras and apps specially designed for 3D mapping buildings and spaces. With endless possibilities in retail, real estate, travel, construction, industrial, areological and insurance fields the possibilities are endless. Through Matterport’s software, people repair, design, build, and promote their properties. With users in 150+ countries the power of Matterport is harnessed by Linked In, Nationwide, Hyatt, Century 21 etc. Giants such as these make up less than 10% of revenue showing that Matterport is well diversified in all aspects of the corporate world.

Matterport brings innovative technology filling a major void in the digital properties’ world. The company has big aspirations, on their investor presentation they compare their addressable market to Zoom dominating digital communications, Netflix rules digital streaming, and PayPal controls digital payment. With a 240-billion-dollar TAM Matterport has a huge opportunity and grew its user base by 18x at the start of the pandemic crushing its 2-year predictions. Matterport features a subscription service allowing for recurring revenue on a monthly basis. Matterport offers multi-tiered subscriptions, ranging from $9 starter to $309 business plan per month. Through a crowd sourcing system Matterport has created a networking affect, meaning the more people that use Matterport the faster, and more accurate the system becomes.

Some key numbers to share:
Market Cap: $612.38M
1Q 21 Revenue: $13.8M 108% Y/Y
Price / Revenue: 11.3 (Based on Annualized Q1 Revenue)
Dollar Based Expansion Rate: 129%

Conclusion:
This disruptive technology will impact retail, real estate, travel, construction, industrial, archeological and insurance offers investors a long runway of growth.

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FYI, the market cap is considerably higher than 600m which is just for the SPAC. You’ll need to dig into the investor presentation to get the EV and multiply by the % share increase over 10$/share.

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GronkDog,

Couple things, one factual and the other subjective.

Factual - GHVI only represents 25% of the market cap of the entire Matterport combined entity. GHVI is the PIPE (public investment in private equity), so it only represents (currently) an investment stake in the Matterport private entity. Once the deal closes, the share count will essentially quadruple along with the market cap—-into the $2.5B range, or $2B EV. You’ll need to multiple that EV/S multiple by four to get the accurate multiple.

Subjective - I owned GHVI briefly, mostly as a “COVID Play,” as we sold out home last summer and used Matterport to do a 3D rendering; I thought it would be useful to a buyer that didn’t want to enter our home in a pandemic. I thought the technology was the coolest thing I’d ever seen. Then, I started seeing homes getting sold in ten minutes, sight unseen, cash only, $50k above asking, no contingencies—-and now that seems to be the norm. The seller’s incentive to use Matterport is completely gone, and now when I go on Zillow, nary a home has a Matterport rendering, probably because it’s totally unnecessary in this market.

The growth rate is enticing, but keep in mind it’s against pre-COVID comps.

Good on your to be where you are at 14 years old. You’ll be wealthy. But, if I’ve learned one thing, it’s that there are plenty of amazing opportunities that are uncomplicated; no need to get into exotics (SPACS, Meme stocks, etc.) to create alpha.

Eric, CPA

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