WM Technology, Inc. (MAPS) recently delivered lower-than-estimated revenue for the third quarter; however, earnings per share (EPS) exceeded expectations. The company provides technology and software infrastructure for the cannabis industry.
WM witnessed slower growth in its top line during this period as legal operators struggled competing with illegal operators. Additionally, Q4 guidance fell short of the Street’s expectations.
With these challenges in mind, let us take a look at the changes in WM’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, WM’s top two risk categories are Ability to Sell and Production, contributing 34% and 31% to the total 29 risks identified, respectively. In its recent quarterly report, the company has added one key risk factor under the Legal & Regulatory risk category.
WM highlighted that it may be subject to Telephone Consumer Protection Act (TCPA) risks for its communications with customers as part of its acquisitions of Cannveya and Sprout. The TCPA restricts calls or text messages made with the use of an automated telephone dialing system without the prior consent of the contacted party. Cannveya enables WM’s clients to directly communicate with their customers, which may expose WM to potential lawsuits under the TCPA.
Moreover, even if third-party clients comply with the TCPA, WM still faces the risk of facing private lawsuits. (See Insiders’ Hot Stocks on TipRanks)
Compared to a sector average of 14%, WM’s Ability to Sell risk factor is at 34%.
Wall Street’s Take
Cantor Fitzgerald analyst Pablo Zuanic has initiated coverage on the stock with a Buy rating and a $11 price target (47% upside potential).
Consensus on the Street is a Strong Buy based on 7 unanimous Buys. The average WM Technology price target of $15.86 implies a potential upside of 112% for the stock. However, the company’s shares saw a 42.6% slide so far this year.
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