Deutsche Bank analyst Bhavin Shah downgraded Matterport to Hold from Buy with a price target of $3, down from $5. The analyst says current consensus subscription estimates for Matterport imply a material acceleration net new annual recurring revenue. The embedded acceleration will be challenging to achieve given the current uncertainties surrounding the economic backdrop, Deutsche tells investors in a research note. The analyst expects 2023 to be another volatile year for software stocks with investors seeking confirmation of a bottom as fundamentals "likely deteriorate further." Deutsche prefers earlier cycle names within software for 2023 over later ones, and tells investors to "selectively begin picking away at quality growth."
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