Checking in With Digital Transformation Stock Matterport

A few days ago, we wrote about bargain hunting for software-as-a–service (SaaS) stocks. The piece was partly about finding value in legacy software companies making the transition to a SaaS business model. In the article, we used PTC Corporation (PTC), a software company that specializes in building design software that has expanded into IoT and augmented reality, as an example. Regular readers know that we favor SaaS business models because these companies should (if they’re doing it right) enjoy predictable, recurring revenue and fat gross margins. In the case of PTC, the move to the cloud especially makes sense given the focus on helping its customers with their own digital transformation by creating digital twins or digitized, interactive copies of things as complex as factories using sensor data and other sources.

Last year we took a look at Matterport (MTTR), a spatial data company that creates digital twins using AI to transform imagery into virtual spaces. The proposition is that tenants can tour a potential apartment from their couch or engineers can review construction progress remotely. The former Silicon Valley startup merged with a special purpose acquisition company (SPAC) in July 2021, not long before the