If the most recent results from ExOne (NASDAQ:XONE) don’t convince you that 3D printing stocks are more hype than reality, you might as well as take a flame to your equity portfolio. XONE stock has been that bad of a bet.
Sure, a couple of years ago, 3D printing stocks were heroes, putting up obscene gains on the promise of the technology transforming a wide swath of industries.
Cut to today, and those hopes have been dashed — at least in the short-term. It’s an exciting new technology, to be sure, but 3D printing isn’t close to taking over the world.
The three best-known publicly traded 3D printing stocks — XONE, Stratasys (NASDAQ:SSYS) and 3D Systems (NYSE:DDD) — have cratered since peaking out. Over the last 18 months, SSYS, DDD and XONE have lost 74%, 78% and 81%, respectively.
Indeed, the only investors making money in 3D printing stocks are the shorts, and boy have they have piled in. At XONE, 30% of the float is still sold short. DDD has 34% of its float sold short, and SYSS’s short float stands at 22%.
That’s a lot of pessimism, and judging by XONE’s quarterly results, it is well placed.
The market knew XONE’s report was going to be ugly. After all, it was supposed to release results about a month ago, but had to delay because of “unforeseen circumstances.”
That is never a good sign. NASDAQ, on which XONE stock trades, even talked of delisting its shares.
XONE Misses Estimates — Again
No one expected ExOne stock to post a profit in the most recent quarter, but Wall Street didn’t foresee such a wide loss. XONE lost $7.7 million in its fiscal first quarter, or 53 cents a share. Analysts surveyed by Thomson Reuters projected a loss of 29 cents a share.
Revenue also missed by a wide margin, coming to $6.8 million in the period, vs. a Street estimate of $8.2 million.
XONE stock has now missed analysts’ top- and bottom-line projections for nine consecutive quarters.
Lower sales and higher costs were to blame for the most recent shortfall. XONE explains that the top line fluctuates quarter-to-quarter because of “the long sales cycle and significance of a machine’s average selling price.”
Fair enough, but it doesn’t mean XONE stock gets a pass. For an ExOne shareholder, all that really means is there’s little visibility here. That’s true for the other players, too. As an analyst at FBR Capital Markets said in a note to clients:
“All we really know is that the stocks are less expensive than they were in the past. That’s different from being actually cheap.”
As the analyst put it, XONE and the other names have come up against “a massive clash of hype versus reality.”
The 3D printing industry appears to have a great future, but it sure is taking longer than the market expected.
At this point, no one knows who’s going to win and who’s going to lose in this new industry, but here’s a good bet: XONE will continue to disappoint the Street, and XONE stock will perform accordingly.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.
