Desktop Metal (DM) is an American 3D printing technology company based in Massachusetts. The company has recently purchased several businesses and is in the process of acquiring ExOne (XONE).
Let’s take a look at Desktop Metal’s latest financial performance, corporate developments, and risk factors.
Desktop Metal’s Q2 Financial Results and 2021 Guidance
Revenue increased 767% year-over-year to $19 million in the second quarter and matched consensus estimates of $19.07 million. The company posted a loss per share of $0.17, which widened from a loss per share of $0.15 in the same quarter last year. Consensus estimates called for a loss per share of $0.09.
For full-year 2021, the company anticipates more than $100 million in revenue, with an adjusted EBITDA loss of between $70 and $80 million. (See Desktop Metal stock charts on TipRanks).
Desktop Metal’s Corporate Developments
Desktop Metal agreed to acquire ExOne in a cash and stock deal worth $575 million. It expects to close the deal by the end of 2021. Desktop is counting on the ExOne acquisition to bolster its position in the additive manufacturing market. During Q2, Desktop acquired Aerosint, Beacon Bio, and Adaptive3D to increase its capabilities.
Desktop Metal’s Risk Factors
The new TipRanks Risk Factors tool reveals 53 risk factors for Desktop Metal. Since December 2020, the company has updated its risk profile to add two new risk factors.
The company launched a healthcare-focused business in March 2021. It says that the healthcare space is highly competitive and that it may face difficulties implementing its business plans and identifying opportunities. It further says that the success of the business will depend on its ability to hire and retain skilled staff, establish a marketing infrastructure, and maintain supply relationships.
In another risk factor, Desktop tells investors that the healthcare sector is highly regulated. It cautions that obtaining regulatory approvals for medical products can be expensive and time-consuming. It says that a failure to secure regulatory approvals or meet compliance requirements could adversely affect its business, harm its reputation, or subject it to fines.
Finance and Corporate is Desktop Metal’s top risk category, accounting for 38% of the total risks. That is below the sector average at 39%. Desktop shares have declined about 49% since the beginning of 2021.
Analysts’ Take
Following Desktop Metal’s Q2 earnings results, Craig-Hallum analyst Greg Palm reiterated a Hold rating on DM stock but lowered the price target to $10 from $12. Palm’s new price target suggests 13.77% upside potential.
Consensus among analysts is a Hold based on 1 Buy, 2 Holds, and 1 Sell. The average Desktop Metal price target of $13.75 implies 56.43% upside potential to current levels.
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