This past year two trades I made a lot of involved 3D printing or earnings reports. Well, this week those two plays are combining, as two of the hot 3D printing stocks are announcing earnings this week. ExOne (XONE) is expected to report Q3 earnings after hours on Wed, 11/13, and VoxelJet AG is expected to report earnings after hours on Thurs, 11/14.
Before we get to earnings estimates, you might be wondering what 3D printing is (no, they aren’t 3D glasses manufacturers). 3D printing is a process of making three dimensional solid objects from a digital model. The possibilities of objects you can make with 3D printing are starting to look pretty limitless, including prototypes, car parts, jewelry, and even human body parts. Yes, it’s officially crossing sci-fi territory. You might also have heard about controversy over 3D printing now that a few manufacturers have used it to make guns. This Businessweek article is some good additional reading on the industry.
3D printing is a fast growing industry so their stocks have been a big trend for investors recently. Big players are DDD, SSYS, and XONE. VJET went public a couple of weeks ago but has already hit $49 from its IPO price of $19. XONE and VJET might be worth checking out this week ahead of their earnings reports.
One reason I like XONE as a longer term play is because it took a recent big price hit, meaning there is a bit more room for upside growth (note: price history should not be your only basis for investment). XONE was up in the 70s before it hit $42 in late september, and has been slowly coming back up.
BUT this drop off makes me very hesitant to get in for an earnings play. The company’s lower revised guidance last quarter, which led to the sell off you see above. Guidance this earnings is going to have a big impact on how the stock performs. I am going to be watching for guidance, as well as for improvement in barriers to adoption (one issue noted last earnings was customers like the product but don’t know how to use it) and units sold.
This year Wall Street is expecting $0.01 EPS non-GAAP on revenue of $12.2 million. This would be the company’s first positive profit as a public company. The past 2 quarters XONE has not met its consensus forecast:
|Quarterly Earnings Surprise History|
Read more: http://www.nasdaq.com/earnings/report/xone#ixzz2kLenRavg
My thoughts: I’m looking to get into XONE as a long term buy. It’s a growing company in a growing industry, and I think the recent drop leaves us with a lot of upside potential. But given XONE’s earnings history I’m either going to short it into earnings and then pick it up, or just play it safe and wait until after earnings to get shares.
VJET has been killing it the past few weeks. Full disclosure, I thought about buying some around $30 last week, and am now kicking myself for not making the trade. VoxelJet’s target market is mainly industrial manufacturers, which gives it a stronger base than some with a focus on the consumer market. Voxeljet also has a competitive advantage over its peers as it has the largest build space and fastest printer in the market.
This being said, the first earnings report after an IPO is always an incredibly risky one. I don’t have the same history to check as I do with XONE, and can’t gauge what the market is looking for or what it tends to react to.
My thoughts: Again, I’m looking to buy VJET, it’s more a matter of when. If I see it gap down a bit in the next few days I’ll enter, if not, I’ll probably wait until after the earnings report and enter then.