What Makes A Bullish Sign For This Publicly Traded Cannabis Tech Company? Cantor Explains

Year-to-date, WM Technology MAPS stock lost 44.90%, while over the last five years it plunged 64.73%. 

The marketplace and technology solutions provider to the cannabis industry recently joined Russell 3000, Russell 2000, and Russell Microcap indexes. 

In June, the company announced a collaboration with Cann, a queer-founded, marijuana-infused beverage company, on a 2022 Pride campaign. The campaign celebrates the LGBTQ+ community with the launch of its first-ever original song and music video – “Taste So Good,” a rallying cry and anthem for a movement focused on radical inclusivity.

WM Technology co-sponsored a new media campaign for Cann that features celebrities like Patricia Arquette, Sarah Michelle Gellar, RuPaul’s Drag Race’s Willow Pillow, Kornbread, and musicians Kesha and Hayley Kiyoko.

The Analyst

Cantor Fitzgerald’s Pablo Zuanic kept an ‘Overweight’ rating on WM Technology stock, lowering the price target to $10.50 from $11.30. 

The Thesis 

The stock has been dragged down by sentiment on US cannabis stock, the analyst said, adding that it could benefit from raised disclosure. “MAPS is NASDAQ listed and two thirds of the free float is held by institutional investors,” Zuanic wrote.

The company does not offer separate figures for the number of subscribers to the WM platform versus the average monthly paying clients (AMPC). If assuming that both are the same, it would make a drop in subscription revenue per client.

“The company said WM business subscriptions were 20% of sales in 1Q22 vs. 23% in 1Q21; in that period, AMPCs increased 28%, so revenue per client would be down 5%,” Zuanic said. 

The analyst added they are enthusiastic about the company’s new services, such as CRM loyalty solutions, dynamic delivery, new payment functionality, and machine learnings, among others, but they don’t see these as “the top-line impact.”

While the average monthly revenue per paying client (AMPRPPC) has continued to improve, Zaunic believes it would be more useful if the company would disclose how much AMPRPPC has increased year-over-year for clients that were in the system a year ago, and by how much it has advanced sequentially.

“The fact that existing clients are spending more would be a bullish signal for the stock.”

Price Action 

Weedmaps shares were trading 3.74% higher at $3.61 per share on Monday morning.

Benzinga Cannabis Capital Conference

Come and meet Weedmaps' CEO Chris Beals in person, and many more like him at the Benzinga Cannabis Capital Conference in Chicago, Sept 13-14. Get your tickets HERE and reserve your spot at the historic Palmer House Hotel HERE.

Photo by Hans Eiskonen on Unsplash