Why ExOne Shares Printed Profits
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of ExOne , a maker of 3-D printing machines and provider of 3-D printing services, jumped as much as 12% after reporting its fourth-quarter results and providing its 2013 forecast.
So what: For the quarter, ExOne sold eight 3-D printing machines, drastically pumping up revenue to $12.7 million and allowing the company to reverse a year-ago loss of $2.8 million into a $0.9 million profit. Machine sales represented 70% of total sales during the quarter and management noted that customer acceptance of its newer machine models and strength in industrial 3-D printing demand drove its results. Looking ahead, ExOne sees revenue growth in a range of $48 million-$52 million, with two-thirds of that revenue expected to occur in the second-half of 2013. Gross margin should land between 42% and 46%.
Now what: Congratulations to ExOne on its profitable quarter, but my resolve that it's grotesquely overvalued still stands. ExOne fills a niche by handling larger industrial 3-D printing that popular play 3D Systems just can't satisfy with its focus on smaller, consumer-oriented products. However, even with this niche advantage, ExOne still only has produced 21 machines in 12 quarters (it takes quite a bit of time to produce those machines) and has just a few global companies comprising their largest customers. This could leave it very exposed to an economic downturn, or even stagnation. Let's be clear: I'm not a fan of any 3-D printing companies here, but if you're looking to get industrial-focused exposure, Stratasys appears to be the smarter play with the specialization capabilities it's acquired because of its merger with Objet. I'm just saying, don't be shocked if ExOne is right back in the loss column again next year.
Craving more input? Start by adding ExOne to your free and personalized Watchlist so you can keep up on the latest news with the company.
Is 3D Systems your best buy in the 3-D printing sector?
3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell the stock today. To start reading, simply click here now for instant access.
The article Why ExOne Shares Printed Profits originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. The Motley Fool recommends 3D Systems and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.