I’ve had an open mind about recommending real estate services company Matterport (NASDAQ:MTTR) stock.

I was initially bullish on it around $10 as it was completing its special purpose acquisition company (SPAC) merger.

MTTR stock then shot to $30, and I urged caution as the valuation had jumped ahead of the fundamentals.

More recently, however, I turned bullish again with the stock back around its initial $10 SPAC price. And, let me tell you, that was a mistake. I tried to give Matterport the benefit of the doubt, but that faith was not rewarded.

Let’s cut to chase, Matterport released earnings on Wednesday and they were just awful. There’s no positive spin to offer here.

Matterport has failed to live up to any reasonable expectations of the firm, and investors should be asking tough questions of the management team at this point.

Just looking at the Q4 results, an optimist could say things weren’t that bad.

The company posted reasonable subscriber growth numbers, and its earnings per share figures were right in-line with estimates. Revenues, however, grew less than 15% year-over-year. And, as you’ll see in a second, Matterport’s anemic revenue growth isn’t about to get much better.

A Closer Look at MTTR Stock

Back when Matterport was still in the process of completing its SPAC merger, it laid out initial long-term guidance for the company.

From $86 million in revenues in 2020, Matterport would grow to $123 million of revenues in 2021 and $202 million in 2022. By 2025, the company would hit $747 million, according to management’s projections, representing a 59% annualized compounded growth rate.

Well, the full-year 2021 numbers are in, and Matterport did $111 million of sales. That’s well short of the original guidance of $123 million, but it’s within a reasonable margin of error. This year, however, is shaping up to be a total fiasco.

For Q1, Matterport is guiding to just $26.5 million in revenues. That’s a mile short of analyst expectations, which were up at $32 million. For the full-year 2022, Matterport now projects $130 million of total revenues.

That’s far below analyst expectations of $160 million and a whopping 35% below the $202 million management told investors to expect when the company initially launched its SPAC deal.

Not Just a Revenue Timing Issue Anymore

When I tried to find the silver lining on MTTR stock in my previous article, much of it was around the sequence of revenues. Matterport used to earn revenues in large part from one-time licensing fees. The company is in the process of switching to a subscription-based revenue model.

As we’ve seen with numerous software-as-a-service (SaaS) companies over the years, there can be a big initial dip in earnings during this transition. It takes a while for the subscriber base to grow, meanwhile, the fat one-time licensing fees dry up.

Analysts understood that Matterport would have a bit of a slowdown on that part of the business due to this switch. All well and good.

However, these quarterly results are far more than just a short-term blip. Rather, the core business is dramatically decelerating. The company’s spaces under management metric is slowing. Matterport added 700,000 spaces under management in Q2. This slowed to 600,000 new spaces in Q3, and just 500,000 in this latest quarter.

Matterport was supposed to show increasing numbers of users and virtual spaces as word-of-mouth grew. As Matterport helps facilitate more real estate transactions, it is supposed to become an integral service that all realtors want to partner with.

Instead, it increasingly seems as if Matterport is not transforming the industry, at least not on the sort of timeline that its SPAC investors had anticipated.

MTTR Stock Verdict

Making matters worse, Q4 featured the frenzy of excitement in the metaverse. If there was ever a time that Matterport was going to get new users to try the platform, that should have been in late 2021.

Instead, spaces under management numbers disappointed, and the forward guidance numbers were wildly short of expectations.

These numbers just aren’t going to cut it. And, with the dismal market for SPACs in general, it’s hard to see how traders will maintain patience with Matterport now.

This is a story stock that has lost all credibility. In this market, MTTR stock could easily end up at $5 or even lower. Matterport still has a cool concept, but in volatile times such as now, a company needs strong fundamentals as well. Until Matterport gets its growth trajectory pointing upward again, the stock is in for a rough ride.

On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a sizable New York City-based hedge fund. You can reach him on Twitter at @irbezek.