WM Technology Stock’s Outlook Is Bullish Despite Industry Missteps
When it comes to cannabis laws, 2021 was supposed to be the year of reform at the U.S. federal level. In the run-up to the November 2020 election, the Democrats said they were the party that would get marijuana legalization on the books.
Well, the Democrats took the White House and Congress, but more than a year into their mandate, federal cannabis reform has stalled. This has put a damper on the bullish momentum that marijuana stocks enjoyed around the time of the 2020 election.
That’s in addition to investor concerns about inflation, the Federal Reserve’s plans, the COVID-19 pandemic, earnings season, and growing tensions with Russia/Ukraine and China/Taiwan.
Few sectors have been hit as hard as U.S. cannabis stocks. The ETFMG Alternative Harvest ETF (NYSEARCA:MJ), the world’s largest marijuana exchange-traded fund, rallied by more than 30% following the U.S. election but ended 2020 down by approximately 10%.
In the opening weeks of 2021, however, investor optimism sent ETFMG Alternative Harvest stock soaring by roughly 140%.
It’s been all downhill since then. Trading at its lowest level since March 2020, MJ stock is down by 15% so far in 2022, and it has lost 50% year–over- year.
At the same time, the bloodbath means there are some amazing pot stocks trading at a bargain.
WM Technology Inc (NASDAQ:MAPS) is one of the most overlooked and—according to Wall Street—undervalued marijuana stocks. As of this writing, MAPS stock is down by:
- 26% month-over-month
- 66% over the last six months
- 80% year-over-year
Part of that might have to do with the fact that WM Technology stock only went public in June 2021 through a special-purpose acquisition company initial public offering (IPO) when it combined with Silver Spike Acquisition (NASDAQ:SPKBW). (Source: “WM Holding Company, LLC, a Leading Technology Platform to the Cannabis Industry, Completes Business Combination With Silver Spike Acquisition Corp.” WM Technology Inc, last accessed January 26, 2022.)
And to be fair, WM Technology Inc’s ambiguous name might not help.
Wall Street analysts don’t judge companies by their names, though. Analysts have looked under WM Technology’s hood, and they love what they see, including rising revenues and ongoing profitability.
Of the analysts providing a 12-month price target for MAPS stock, their average forecast is $13.80 and their high estimate is $17.00. This points to potential gains of 190% and 257%, respectively. Even the low estimate of $11.00 points to potential gains of 131% for WM Technology stock.
Chart courtesy of StockCharts.com
About MAPS Stock
For WM Technology Inc, knowledge is power. The company is a leading technology and software infrastructure provider to the cannabis industry.
The company’s flagship web site and app, “Weedmaps,” provides users with everything they need when it comes to cannabis. This includes retailers, brands, strains, prices, special deals, order-placing, and consumer education (e.g., marijuana uses and legal status). (Source: “About WM Technology,” WM Technology Inc, last accessed January 26, 2022.)
Weedmaps’ easy-to-use listing service connects 13.9 million monthly active users to more than 4,400 clients that pay, on average, $3,817 per month.
There’s more to WM Technology Inc than Weedmaps, though. The company has an expanding portfolio of cloud-based software as a service (SaaS) and business-to-business (B2B) software (point of sale, logistics, wholesale, and ordering information). That makes it the go-to destination for the U.S. cannabis industry.
The company isn’t just focused on the U.S., either. It also targets Canadian consumers and has offices in Spain.
WM Technology Inc Announces Two Acquisitions
WM Technology Inc is always growing.
In September 2021, the company announced that it had acquired Sprout, a leading cloud-based cannabis customer relationship management (CRM) and marketing software company. (Source: “WM Technology, Inc. Acquires Leading Cannabis CRM & Marketing Platform Sprout,” WM Technology Inc, September 14, 2021.)
Sprout’s platform is used by marijuana dispensaries and brands in the U.S., Canada, and Puerto Rico.
Sprout’s CRM platform includes text and e-mail marketing, loyalty programs, mobile wallets, QR codes, mobile surveys, mobile coupons, advanced customer segmenting, and analytics.
“With the addition of Sprout, we are one step closer to realizing this vision of providing an all-in-one seamless and integrated solution to run, manage, and grow one’s cannabis business,” said Chris Beals, WM Technology Inc’s CEO and chairman. (Source: Ibid.)
During the third quarter ended September 30, 2021, WM Technology also acquired Transport Logistics Holding Company, LLC, the parent company of delivery software “Cannveya” and cannabis integration software “CannCurrent.” (Source: “WM Technology, Inc. Reports Third Quarter 2021 Financial Results,” WM Technology Inc, November 11, 2021.)
Another Strong Quarter & Outlook
For the third quarter of 2021 , WM Technology Inc announced that its revenue increased by nine percent year-over-year to $50.9 million. (Source: Ibid.)
The company’s monthly active users increased by 37% to 13.9 million, while the average monthly revenue per paying client went up by seven percent to $3,817.
Its third-quarter 2021 net income was $49.2 million, or $0.32 per share, up significantly from $15.5 million, or $0.02 per share, in the same prior-year period.
WM Technology Inc’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the third quarter were $10.4 million, compared to $16.5 million in the same prior-year period.
The company ended the third quarter of 2021 with $77.9 million in cash and equivalents.
For the fourth quarter, WM Technology Inc expects to report revenue between $50.0 and $52.0 million and adjusted EBITDA between $3.0 and $5.0 million.
WM Technology stock is an overlooked technology play that could be perfect for investors who want to invest in a U.S. pot stock but don’t want to invest directly in a cannabis producer or seller.
WM Technology Inc has a strong balance sheet. It achieved double-digit revenue growth, strong earnings growth, and healthy EBITDA profitability in the third quarter of 2021.
The company’s users and paying clients have gone up, and WM Technology recently announced two strategic acquisitions that could open up new opportunities in 2022.