WM Technology (MAPS) is an online platform that connects cannabis users with dispensaries.
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It started trading on the NASDAQ in June by means of a merger with Silver Spike Acquisitions, a SPAC. The company’s stock closed at $15.42 on Friday. (See MAPS stock charts on TipRanks)
I am bullish on WM Technology, and recommend a long-hold position. Its stock price has been on an uptrend and revenues have increased year-to-year, and quarter-to-quarter.
The company’s product is essential to the cannabis industry, and usership continues to grow. The company operates with a net income and gross profit.
Weedmaps and WM Business
Weedmaps is a website and mobile app that cannabis users and retailers find useful. Its SaaS platform allows cannabis retailers to list their dispensary for a subscription fee.
Cannabis buyers join for free, and search for cannabis dispensaries. They also see what brands and cannabis strains are available from each retailer, its location, and daily specials.
With expanded services, a retailer can set up an online ordering system, so the customer may place an order for in-store pick-up. In addition to connecting customers with dispensaries, the website offers knowledge about cannabis strains and brands.
Weedmaps is the B2C platform, while WM Business is the B2B side of the platform. Revenues come from the B2B segment.
Q2 Earnings
The company reported Q2 revenues of $46.9 million, a 21% increase from the previous year, and a 14% increase from the last quarter. Gross profit was $45 million, a 47.1% increase from the previous year. Monthly active users increased by 75% year-over-year, to 12.3 million.
The company reported a net income of $16.8 million, compared to $9.4 million from the previous year.
WM Technology has $91.7 million in cash, and $120.6 million in current assets. Its current liabilities total $37.5 million.
Competition with Leafly
Leafly is another company offering the same services, including knowledge on brands and cannabis strains.
The company plans to go public later this year, via a SPAC merger. Its usership and revenues are lower than Weedmaps’, but it has equal potential and growth. For now, cannabis retailers tend to register on both websites. There is room in the emerging cannabis market for both companies to profit from the same business strategy.
Wall Street’s Take
According to Wall Street, WM Technology has a Strong Buy consensus rating, based on four Buy ratings assigned in the past three months. At $18.50, the average WM Technology price target implies 20% upside potential.
Conclusion
Investors should consider cannabis and cannabis support stocks.
WM Technology is an essential and key cannabis support company, with only one competitor. The company also reports increasing revenues and usership.
One should keep an eye on, or even open a long position with, WM Technologies.
Disclosure: At the time of publication, Alan Sumler did not have a position in any of the securities mentioned in this article.
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