MAPS Stock Poised for Big Gains
If knowledge is power, WM Technology Inc (NASDAQ:MAPS) could create some of the most powerful marijuana consumers on the planet.
A leading technology and software infrastructure provider to the cannabis industry, the company has been around since 2008. WM Technology stock, however, only went public in June through a special-purpose acquisition company initial public offering (IPO), when WM Technology combined with Silver Spike Acquisition Corp.
MAPS stock might be new, but analysts are bullish on the Irvine, CA-based stock, with an average 12-month price target of $18.75. At WM Technology stock’s current price, that represents potential near-term upside of 37%. Analysts’ high estimate is $21.00, which points to potential gains of roughly 54%.
Why the bullishness about WM Technology Inc?
More and more U.S. states have been legalizing recreational cannabis, so the need for a platform that connects cannabis consumers, retailers, doctors, and brands has never been higher.
WM Technology’s flagship platform provides cannabis consumers with all the information they need regarding purchasing cannabis products, including retailers, brands, strains, pricing, and placing orders. (Source: “About WM Technology,” WM Technology Inc, last accessed October 21, 2021.)
The company is also the go-to destination for the cannabis industry. Its cloud-based software as a service (SaaS) and data suite include point-of-sale, logistics, wholesale, and ordering information.
WM Technology Inc’s “Weedmaps” listing service connects about 12 million monthly active users (MAUs) with more than 4,000 paying merchants.
For consumers, the Weedmaps web site is pretty easy to use. It’s populated with local dispensaries, nearby deals, featured brands, best-ranked products, etc. The related app means users can find any information they need on the go.
Because MAPS stock is listed on the Nasdaq, it’s easier for investors to discover than the vast majority of cannabis stocks.
Most marijuana stocks cannot list on the Nasdaq yet, because cannabis is still illegal in the U.S. at the federal level. But for companies not involved in “plant touching” like WM Technology Inc, the Nasdaq is free game.
WM Technology isn’t just focused on the U.S. either, even though the country is the biggest cannabis market in the world. The company also targets Canadian users, has offices in Spain, and has been growing its global footprint.
Acquisition of Sprout
To keep its leading edge, WM Technology continues to expand its operations, products, and services.
On September 21, the company announced that it had acquired Sprout, a cloud-based marijuana 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 CRM platform is used by cannabis dispensaries and brands across the U.S., Canada, and Puerto Rico.
The CRM platform includes customer relationship management, text/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’s CEO and chairman. (Source: Ibid.)
Great Q2 Results
The acquisition of Sprout will help juice WM Technology’s bottom line, which has already been doing quite fine.
During the second quarter, the company announced that its revenue increased by 21% year-over-year to $46.9 million. (Source: “WM Technology, Inc. Reports Second Quarter 2021 Financial Results and Affirms 2021 Outlook,” WM Technology Inc, August 12, 2021.)
When adjusted to exclude revenue associated with Canada-based retail operators that failed to provide valid license information and were subsequently removed from the Weedmaps marketplace, WM Technology Inc’s second-quarter revenue was up by 55%.
The company’s MAUs increased by 75% year-over-year to 12.3 million. Its average monthly revenue per paying client increased by 24% to $3,706.
WM Technology Inc’s average monthly paying clients decreased by two percent year-over-year to 4,221. Excluding the statistics related to Canada-based retail operators that failed to provide valid license information, WM Technology’s average monthly paying clients increased by 28%.
The company reported second-quarter net income of $16.8 million, or $0.07 per share, up by 79% over the second-quarter 2020 net income of $9.4 million.
Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were $8.5 million, compared to $10.4 million in the same period last year.
WM Technology Inc ended the second quarter with $91.7 million in cash and total debt of $47.3 million.
The company’s management said it expects to report full-year revenue of $205.0 million and adjusted EBITDA of $50.0 million.
Chart courtesy of StockCharts.com
WM Technology Inc is an excellent cannabis stock for those who don’t want to invest directly in the marijuana industry.
The company has a solid balance sheet, it recently reported double-digit revenue growth, and is profitable. It also has a growing number of users and paying clients.
Moreover, the company has been investing in multiple product-driven growth opportunities and new market openings for 2022 and beyond.
All that bodes well for the value of WM Technology stock.