Why ExOne Co.'s "Transition Year" Is for the Best
ExOne's fourth-quarter earnings and 2014 sales guidance didn't meet analyst expectations, resulting in the stock selling off more than 8%. To make matters more troubling, management cited during the conference call that 2014 will be a "transition year," a cringe-worthy statement for investors to hear about an emerging growth company with bright prospects.
The reason for the harsh language doesn't necessarily have anything to do with the recent results of ExOne's business. The company came to realize that its products and services haven't been as well received in the metal casting industry as it had hoped. This key target market has proven to be more guarded and resistant to embracing ExOne's mold-making 3-D printing product, which require zero tooling, essentially devaluing industry trade secrets around tool making. In other words, the metal casting industry is scared that ExOne's technology is rendering the foundry business as we know it obsolete.
In the following video, 3-D printing analyst Steve Heller explains to investors that even though 2014 may be a transition year for ExOne on paper, it's in the best long-term interest of the company. By focusing directly on the end users that need its products and services instead of the foundries themselves, it has a chance to completely disrupt how the archaic casting business operates today. Ultimately, this could open up an even greater opportunity for the company down the road.
One must-own stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
The article Why ExOne Co.'s "Transition Year" Is for the Best originally appeared on Fool.com.Steve Heller owns shares of ExOne. The Motley Fool recommends ExOne, Ford, and General Motors. The Motley Fool owns shares of ExOne and Ford. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.