On Tuesday, Deutsche Bank adjusted its price target for Matterport, Inc (NASDAQ:MTTR), a spatial data company, in light of recent acquisition news. The price target has been increased to $5.50 from the previous $3.00, while the Hold rating remains unchanged. This revision follows Matterport's announcement earlier in the day of its acquisition agreement with CoStar Group (NASDAQ:CSGP).
The acquisition proposal entails a $5.50 per share valuation for Matterport, split equally between cash and CoStar Group shares, representing a 216% premium over Friday's closing price. The deal places Matterport's value at approximately $1.6 billion. Deutsche Bank's analysis suggests that the transaction values Matterport at 9 times its projected calendar year 2024 revenue and 8 times its projected calendar year 2025 revenue.
The agreement has received unanimous support from Matterport's board of directors. Additionally, directors, officers, and certain stockholders, who collectively represent around 15% of the fully diluted share count, have entered into voting support agreements.
Deutsche Bank anticipates that the acquisition will proceed smoothly, with no competing bids likely to emerge, given the potential for revenue synergies between Matterport and CoStar Group's portfolio of residential and commercial real estate services, which includes platforms like Apartments.com, Homes.com, and LoopNet.
Deutsche Bank's revised target price of $5.50 aligns with the agreed transaction price, reflecting the terms of the acquisition. The bank's commentary indicates a positive outlook for the completion of the deal, considering the strategic alignments and the backing it has received.
InvestingPro Insights
Following Deutsche Bank's price target adjustment for Matterport, Inc (NASDAQ:MTTR), recent data from InvestingPro provides additional context for investors considering the company's financial health and market performance. Matterport holds a market capitalization of approximately $1.51 billion, reflecting its position in the market. Notably, the company's revenue saw a 15.88% increase over the last twelve months as of Q4 2023, indicating a positive trajectory in sales. Despite this growth, the company's operating income margin was reported at -133.09%, underscoring the challenges it faces in translating sales into operational profitability.
Investors interested in the stock's recent performance will find that Matterport has experienced a significant return over the last week, with a 166.67% price total return. This sharp increase aligns with the acquisition news and may influence investor sentiment. Two InvestingPro Tips that are particularly relevant in light of the acquisition announcement are: Matterport holds more cash than debt on its balance sheet, which could be a sign of financial stability, and three analysts have revised their earnings upwards for the upcoming period, suggesting a favorable outlook on the company's future performance.
For investors seeking a deeper analysis, there are 14 additional InvestingPro Tips available, which could provide further insights into Matterport's financial health and market potential. To access these tips and more detailed analytics, consider subscribing to InvestingPro using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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