The historically-high inflation, labor shortages, ongoing supply chain disruptions, and rising oil prices have made investors anxious. The historically-high inflation, labor shortages, ongoing supply chain disruptions, and rising oil prices have made investors anxious. The consumer price index increased 6.2% in October—its biggest jump since December 1990. However, robust retail sales drove the stock market higher, with the S&P 500 and Nasdaq now currently hovering near their record highs.
According to the U.S. Commerce Department, retail sales rose a seasonally adjusted 1.7% in October. In addition, the unemployment rate fell to 4.6% in October, its lowest level since the economic recovery began in May 2020. Furthermore, Goldman Sachs (GS) expects the economic recovery to reaccelerate in the coming quarters, driving the unemployment rate back to a 50-year low by the end of next year.
Against this favorable backdrop, we think it could be wise to bet on fundamentally-strong stocks WM Technology, Inc. (MAPS) and Enthusiast Gaming Holdings Inc. (EGLX). Though these companies missed earnings estimates in their last reported quarter, they have the potential to soar in price this month and beyond. Wall Street analysts expect these stocks to rally more than 85% in the near term.
WM Technology, Inc. (MAPS)
Irvine, Calif.-based MAPS provides SaaS subscription offerings to retailers and brands in the United States and Canadian cannabis markets. The company operates the Weedmaps listings marketplace that provides consumers with information regarding cannabis retailers and brands and the strain, pricing, and other information regarding cannabis products.
On September 14, 2021, MAPS announced the acquisition of Sprout, a leading, cloud-based CRM and marketing platform for the cannabis industry. The acquisition further enhances the company’s marketing solutions for managing and growing cannabis businesses.
MAPS’ revenues increased 9.4% year-over-year to $50.88 million in the third quarter, which ended September 30, 2021. The company’s total assets grew 572.8% sequentially to $362.62 million, while its net income came in at $49.21 million, representing a 216.8% year-over-year increase. Also, its monthly active users came in at 13.91 million, up 37% year-over-year.
Analysts expect MAPS’ EPS and revenue to increase 81.5% and 36.5%, respectively, year-over-year to $0.49 and $260.73 million in its fiscal year 2022. Its third-quarter results missed estimates on the top and bottom lines. The stock closed yesterday’s trading session at $8.81.
Wall Street analysts expect the stock to hit $16.67 in the near term, which indicates a potential 89.2% upside.
Enthusiast Gaming Holdings Inc. (EGLX)
EGLX is in the media, content, entertainment, and esports businesses internationally. The Toronto, Canada-based company operates an online network of approximately 100 gaming-related websites; owns and operates Enthusiast Gaming Live Expo, a video-gaming expo; and provides management and support services to players involved in professional gaming.
On September 2, 2021, EGLX announced the acquisition of GameKnot LLC, which is owner of the chess fan community GameKnot.com. Adrian Montgomery, CEO of EGLX, said, “This acquisition is in line with Enthusiast Gaming’s buy and build strategy for gaming communities, responds to growing interest in chess from members of our Luminosity Gaming roster such as xQc and NickEh30, and capitalizes on recent viewership growth for chess on Twitch.”
MAPS’ revenues increased 165% year-over-year to CAD43.34 million ($34.58 million) in the third quarter, which ended September 30, 2021. The company’s total assets grew 46.9% sequentially to CAD326.49 million ($260.46 million), while its gross profit came in at CAD10.13 million ($8.08 million), representing 146% year-over-year increase. Also, its paid subscribers were 207,000, up 85% year-over-year.
MAPS’ third-quarter results did not meet Wall Street expectations. The stock closed yesterday’s trading session at $8.07, which was 122.5% above its 52-week low of $1.51.
Wall Street analysts expect the stock to hit $8.45 in the near term, which indicates a potential 138% upside.
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MAPS shares were trading at $8.45 per share on Wednesday afternoon, down $0.36 (-4.09%). Year-to-date, MAPS has declined -33.83%, versus a 26.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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