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Nano Dimension: One Stunning Statistic to Rule them All
Stock Analysis & Ideas

Nano Dimension: One Stunning Statistic to Rule them All

Story Highlights

Nano Dimension stock is surprisingly cheap, and the company is aggressively buying its own shares. Plus, Nano Dimension’s sales growth should convince any skeptics that the additive manufacturing industry has a robust future.

Based in Israel, Nano Dimension (NNDM) provides additive manufacturing and 3D printing technology. I am bullish on the stock.

Imagine being able to combine 3D printing capabilities with advanced factory robotics and best-in-class hardware and software, as well as deep-learning artificial intelligence (AI) capabilities. This might sound futuristic, but it’s a reality in the 2020s and Nano Dimension is pioneering this exciting field.

Nano Dimension bills itself as a “provider of Additively Manufactured Electronics (AME) technology – an alternative in-house method of fabricating printed circuit boards (PCBs) and other electronic devices.” The company seeks to change the way the world manufactures – an ambitious goal for a business with a sub-$1 billion market capitalization.

This is the type of company that’s not gigantic today, but could grow into a powerhouse someday. Along with that, the Nano Dimension share price might have 2x or even greater upside potential, as it’s surprisingly cheap right now.

As we’ll see, there’s evidence that Nano Dimension is quite confident on its own growth prospects. Plus, even while the company acknowledges a particular challenge in the additive manufacturing industry, Nano Dimension has demonstrated its ability to deliver eye-opening financial results.

Big Buybacks

When we look back at the price history of Nano Dimension stock, it’s clear that a 2x move is entirely possible. Cheap stocks can be volatile, so small position sizing is essential, but high risk can sometimes also mean huge rewards.

Nano Dimension stock has gone as high as $9.30 during the past 12 months, but recently traded near $3. If you believe in Nano Dimension as a company, then you have an opportunity to own a stake at a deep discount.

Indeed, the company recently seemed to contend that its shares are a great bargain at the current price point. According to Nano Dimension, “buyers of our shares at the current price, as it trades below its cash value, actually imitate an investment in a ‘value company.’” This, in practical terms, means that “Nano Dimension’s share price represents a potential valuation upside of a high growth business but with lower downside, more similar to a value-model investment profile,” the company added.

It’s interesting to see Nano Dimension emphasizing the value of its stock. Of course, the skeptics might claim that this is only the company’s attempt to convince people to buy into NNDM. However, there’s clear evidence that Nano Dimension is willing to “put its money where its mouth is,” so to speak.

Not long ago, Nano Dimension’s board of directors approved a one-year share repurchase plan allowing the company to buy back up to $100 million worth of the company’s American Depository Shares (the U.S. version of Nano Dimension stock). This doesn’t necessarily mean that Nano Dimension will actually end up buying $100 million of its own stock, but the board’s action seems to represent a major vote of confidence in the company.

On TipRanks, NNDM scores a 2 out of 10 on the Smart Score spectrum. This indicates a potential for the stock to underperform the broader market.

A Number You Won’t Forget

Of course, investors shouldn’t buy a stock just because the company plans to repurchase its own shares. It’s crucial to weigh the company’s challenges along with its growth prospects, and make an informed decision based on the available data.

Without a doubt, supply-chain constraints are among the challenges that Nano Dimension has had to face in 2022. Yet, there’s another difficulty which the company directly acknowledged, and even recently discussed in detail.

In a message from President and CEO Yoav Stern to Nano Dimension’s shareholders, Stern is refreshingly forthright about his company’s difficulty when it comes to sourcing qualified talent. Apparently, Nano Dimension is having trouble “recruiting the quality scientists and engineers that we need, especially in the USA and Israel, and specifically in the fields of software, data science, algorithm design and material science as well as high level technical sales and application engineers.”

The CEO further acknowledged that this problem affects Nano Dimension’s “ability to accelerate our business plans.” The honesty is definitely appreciated, and hopefully the talent sourcing issue will be resolved in time. For now, though, investors will still want to know whether Nano Dimension is capable of delivering strong financial results.

Let there be no doubt about it: The answer to that question is definitely yes. During 2022’s first quarter, Nano Dimension reported generated $10.4 million in revenue, representing a mind-blowing increase of 1,186% year-over-year. On a sequential basis, the revenue increase was 38% – not quite as mind-blowing, but still notable.

In case you’re not convinced after seeing that unforgettable revenue growth stat, here’s another positive data point for you. Nano Dimension ended 2022’s first quarter with a cash and deposits balance of $1.3 billion, which suggests that the company maintains a solid capital position.

Earnings

Nano Dimension is expected to report Q2 earnings on August 17, 2022.

The Takeaway

Only time will tell whether Nano Dimension will be able to acquire all of the qualified talent the company needs to pursue its business interests. In the meantime, though, Nano Dimension’s quadruple-digit revenue growth should quell the skeptics’ concerns.

Besides, Nano Dimension appears to be preparing to buy its own shares, and this should provide a real confidence booster for the company’s retail investors. Therefore, don’t hesitate to add a few Nano Dimension shares to your portfolio in anticipation of a boom in the additive manufacturing industry.

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