Analysts Flock to Cannabis Penny Stock WM Technology Amid Regulatory Hopes

Analysts are bullish on WM Technology (MAPS), a leading provider of SaaS and marketplace solutions to the cannabis industry. With a growing portfolio of tech-driven products, MAPS stock is seen as an intriguing way to play the rising interest in the cannabis sector. Despite revenue declining 2% YoY, the company's adjusted EBITDA surged 16% and margins expanded to 26%. Analysts at Westpark Capital have a "Strong Buy" rating and a $2.61 price target for MAPS stock.

Analysts are bullish on WM Technology (MAPS), a leading provider of SaaS and marketplace solutions to the cannabis industry. Despite a 2% year-over-year (YoY) decline in revenue, the company's adjusted EBITDA surged 16% in Q2, reflecting strong operational performance. The company's margins expanded to 26%, signaling improved efficiency. Analysts at Westpark Capital have a "Strong Buy" rating and a $2.61 price target for MAPS stock [1].

MAPS reported Q2 revenue of $44.8 million, down 2% from the prior year, but in line with its guidance. Adjusted EBITDA for Q2 was $11.7 million, exceeding the forecast and growing 16% from a year earlier. The company also reported an even stronger balance sheet with no debt and a cash increase to $59 million. The tangible book value increased to $57.8 million [1].

The outlook for MAPS is mixed in the short term. The company guided for Q3 revenue of $41-43 million and adjusted EBITDA of $5-7 million, both down sequentially. However, analysts expect the company to report positive EPS in 2025, $0.16, and increase to $0.20 in 2027 [1].

MAPS could benefit from potential cannabis rescheduling, which could eliminate 280E taxation for American cannabis growers and sellers. This would reduce the effective tax rate for cannabis companies, potentially boosting spending and revenue for MAPS. However, the fate of 280E taxation remains uncertain [1].

MAPS is an extremely cheap stock. With 184 million shares outstanding and a market cap of $206.1 million, the enterprise value is just 4.1X the 2025 projected adjusted EBITDA, a very low valuation for a NASDAQ-listed company. The company's 2025 PE is just 7X, indicating significant upside potential [1].

The MAPS chart suggests a buy signal. The stock is down 18.8% in 2025 but has held up well this quarter, rising 25% in price. The stock is currently testing support at $0.90-$0.95, with the 50-day moving average providing additional support. The Global Cannabis Stock Index has increased 2.5% so far this year, with MSOS, a peer of MAPS, more than doubling [1].

However, there are risks to consider. MAPS could face delisting if it can't hold above $1.00. Additionally, if 280E taxation remains, its customer base may continue to resist spending on its technology. The company has not attempted to move beyond the cannabis industry, which could limit its growth potential [1].

Despite these risks, MAPS remains an intriguing investment opportunity for those looking to play the rising interest in the cannabis sector. The stock's cheap valuation and strong operational performance make it an attractive pick for investors [1].

References:

[1] https://seekingalpha.com/article/4816254-wm-technology-could-double