It won’t be too long now before everyone has a three-dimensional (3D) printer. It’s the kind of investment theme that speculators should be looking at today and on an ongoing basis. In fact, the early stage growth trend for this story is already over.
Previously in this column, I told you about The ExOne Company (XONE), which is based out of North Huntington, PA and designs 3D printing machines that are used by customers all over the world, mainly for industrial use. While there is still an industrial focus for 3D printers, the transition to consumer-based models is happening now. (See “New IPOs Hitting the Tech Sector; Microsoft and Intel Struggling.”)
3D printers help designers and engineers to produce industrial prototypes and production parts. ExOne sells its products to the aerospace, automotive, and heavy equipment markets.
This enterprise just opened a new production service center in Auburn, WA, as well as new sales centers in Sao Paulo, Brazil and Shanghai, China. Even though this is one of the many new initial public offerings (IPOs) recently listing on the stock market, you want to be following this company and others like it.
The company’s second-quarter financial results are on tap next week. In its first quarter of 2013, the company generated revenues of $7.9 million, up from $2.7 million in the first quarter of 2012. The revenues number actually fell short of Wall Street expectations, but at this early stage, it’s a bit of a stock market tantrum. This company is generating real economic growth, and it’s why the entire 3D printing group is worth looking into.
Earnings, or a lack thereof, were a net loss of $1.9 million, compared with a net loss of $1.5 million in the first quarter of 2012, due to higher operating expenses. However, net losses are a completely normal financial metric for an early-stage, growing startup company.
ExOne reported machine revenues of $4.2 million. The rest is for parts and materials. The company sold five machines (four 3D printing machines and one laser machine) in the first quarter of 2013, compared to no machines sold in the first quarter of 2012. (Remember: early startup.)
Always important for a developing, early-stage company is its cash balance. As of March 31, 2013, ExOne had $71.1 million, which the company’s management figures is enough to fund the company’s growth over the next two to three years. The company has a small amount of long-term debt.
I think speculative investors need to put all 3D printer manufacturers on their radar. No doubt, more will be listing on the stock market.
Innovation has always been the key to generating real economic growth, and ExOne is a real contributor to innovation. As is usually the case, the stock is ahead of itself price-wise, but that doesn’t mean ExOne won’t turn out to be a big success. This is definitely an enterprise worthy of your attention.
While 3D printing is a luxury item now, this is going to change quickly over the next several years. It’s an innovation trend that has real staying power.