Cantor Fitzgerald has issued a new report on cannabis tech platform WeedMaps (NASDAQ:MAPS), also known as WM Technology Inc.
Analyst Pablo Zuanic said he remains Overweight, but lowered the company’s 12-month price target significantly, to $6.25 from $11.
Shares from the company were valued at $4.56 at the time of this writing.
Zuanic said that market conditions and economics for licensed retail operators in California, where WeedMaps conducts most of its business, have worsened.
“We calculate CA accounts spend 4x in the MAPS platforms (CA is about 60% of company sales) compared with non-CA accounts,” Zuanic writes. That imbalance poses a risk to guidance posted by the company for 2022.
A clear increase in spending by non-California accounts, as well as gaining more accounts outside California should be the main growth drivers in 2022, Zuanic said. Yet, the Cantor Fitzgerald analyst does not believe WeedMaps management has provided enough of a roadmap to feel comfortable with projected growth for 2022, which was posted by the company to be in the “high 30’s,” meaning around 38%.
As a result, the firm remains Overweight, but would prefer to wait to increase positions until hearing from management in the 4Q call, to be held in late February or early March, specifically regarding guidance and a more detailed growth blueprint.
On a positive note, Zuanic said he’s encouraged by consistent growth in monthly average users, which is up almost 40% year-to-date to 13.9 million; as well as growing engagement across the various verticals of the WeedMaps platform from monthly active users.
Cantor is also looking forward to the company monetizing non-paying clients currently in the WeedMaps marketplace.
Photo by Christin Hume on Unsplash.
