This SPAC could be the best stock of the decade
I’m usually not that enthusiastic about IPOs or Special Purpose Acquisition Company (SPAC) mergers because they often come with more uncertainty and risk than I would like to take on as a investor. But every once in a while there’s a business that comes into the market that I see as a once in a lifetime opportunity
This is why the announcement this week of the merger of Matterport with Gores Holdings VI (NASDAQ: GHVI) had me extremely excited. Matterport has built incredibly powerful technology for the real estate market, and its spatial data business is just beginning to scratch the surface of its potential.
What does Matterport do
Matterport is essentially a building digitization application, transforming physical space into digital space. The company does this with professional cameras that can quickly create a “dollhouse” layout with the 360-degree scans, which you can see in the image above.
This has traditionally been done with professional cameras, but the real revolution for Matterport has been to create a mobile app that can perform many of the same functions with nothing more than a smartphone. Simply scan every room in your home or business and a complete, shareable layout is created.
The applications of this tool cover a number of industries, from real estate to insurance and catering. And the uses – and the revenue potential – of technology continue to grow.
Just the beginning
As Matterport adds to its 250,000 subscribers and 4.4 million spaces under management, it has great potential to both grow its user and building base and increase use cases. Management says there are 4 billion buildings in the world with 20 billion spaces, which, at $ 1 per space per month, would represent a total addressable market of $ 240 billion. Even capturing a small fraction of that, the business could grow quickly from its current revenue of $ 100 million.
But the use cases as the technology goes mainstream are amazing. If you can measure spaces automatically, analyze and troubleshoot buildings with real-time data, and share spaces with anyone in the world with little more than a smartphone, there’s incredible value to unlock. The possible impact on construction, real estate sales, furnishing of spaces and even building management is difficult to predict. And Matterport is just starting to exploit this opportunity.
Not to mention the possible impact on the business of improved augmented and virtual reality headsets and glasses. These emerging technologies could unlock a number of growth markets for Matterport that tap into its existing asset base.
Growth stock for the next decade
The digitization of real estate assets is only just beginning and Matterport is already an industry leader. The company’s technology is not only powerful, it is also easy to use and has obvious value for those who use it.
I’m not sure if Matterport will hit any of the projections it made in an investor presentation, like $ 747 million in revenue and 73% gross margin in 2025, compared to an estimated revenue of $ 86 million. dollars for 2020 and a gross margin of 56%. Even if it doesn’t hit those numbers, I think the company has the potential to be a very high growth stock with a huge market to expand into. For long-term investors, this is the kind of business that could be the best stock of the next decade.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.